The Twenty-first Century Animal Farm

The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which.” (George Orwell: Animal Farm)

कुछ तो ख़ासियत है इस प्रजातंत्र मे
वोट देता हूँ फकीरों को कंबख्त शहंशाह बन जाते हैं

(There is something special about this republic;

I vote for ascetics, the wretched fellows become emperors)

(Source: unknown)

December 2017 was a milestone in Indian jurisprudence. Three CBI courts, two in Delhi and one in Ranchi, delivered judgments in corruption cases that have exercised the public mind over the past many years. The verdicts were a mixed bag: while former bureaucrats were indicted in two of the cases, politicians got away fully in one case and partially in another case. The fodder scam related to a straightforward loot of the government treasury while the coal and 2G spectrum scams involved the questionable use of discretion at the highest levels of government in the allocation of natural resources, one below the ground and the other in the air. That discretion is still alive and kicking in the government is confirmed by the replies to a recent RTI query that stated that two successive Ministers of the Human Resource Development Ministry of the Government of India have, in the past three years, recommended, as against their annual quota of 450 cases, over 35,000 cases of students for admission to Kendriya Vidyalayas, of which nearly 20,000 have actually got admission.

Which begs the question: are governments, even those which swear by eradication of corruption, really different from one another? An answer to this is sought to be given by a book  The Dictator’s Handbook: Why Bad Behavior is Almost Always Good Politics. The authors, Bruce Bueno de Mesquita and Alastair Smith, have, based on years of research and field studies, concluded that leaders are only concerned about power: concepts like “national interest” and “welfare of the people” are relevant to them only insofar as they promote the perpetuation of their power. It is irrelevant whether the leaders are despots or democrats — what preoccupies them ultimately is how to secure power and, having occupied the hot seat, how to stay on there for as long as possible.

In this quest for power, three groups are relevant to the politician. These are the interchangeables, the influentials and the essentials. The interchangeables are those who choose their governments: in the case of India, the entire population above the age of eighteen. In the “first past the post principle” that governs Indian elections, it is enough if, say, in a three-cornered contest where 60% of the electorate votes, the winning candidate secures 21% of the vote. The size of the interchangeables that determines the outcome of the election is then barely a fifth of the voting population.

Given the social cleavages in India along ethnic and religious lines (more pronounced in rural areas and small towns), a candidate from a dominant ethnic or religious group needs to marshal the support of her group to emerge victorious at the hustings. It is here that the influentials matter: composed of those who can control “vote banks” through use of money and muscle power as well as through their command over ethnic-based patronage structures.

But, in the final analysis, the ability of the leader to acquire and retain power depends on her essentials, those in his inner circle who have access to funds and control the party bureaucracy. These essentials are a necessary evil: they help propel the leader to the top, but the leader is always uneasily aware that many among them harbour ambitions of replacing her.

The Indian political scene over the past seventy years has seen the evolution of three distinct cultures, two of which have risen and ebbed with the passage of time, while the third one is presently at its apogee. The first was the Congress culture, which was virtually unchallenged till 1967 but thereafter faced challenges from regional formations till its upset in the 1990s followed (after a ten-year second honeymoon) by its greatest electoral disaster in India’s electoral history. This culture relied on powerful caste leaders marshalling votes of their fellow caste-persons for the Congress, aided by the use of muscle and money. Post-1975, the leader always centralised power in a small coterie of essentials, with leadership of state governments and state party units being decided by the High Command, essentially composed of the leader and her trusted lieutenants. For unhesitatingly accepting the suzerainty of the leader, the state satraps (and their Delhi counterparts) were allowed to exercise patronage in a variety of government functions – procurement contracts, allocation of scarce resources (including even government housing) and postings and transfers of government servants. Post-1991, the patronage also extended to the allocation of natural resources, as the opening up of the economy led to the drying up of some traditional sources of patronage. Of course, an eagle eye was kept on all these functionaries to ensure that they delivered an adequate share of the unearned economic rent to the top, apart from checking any efforts to assert independence from the High Command.

As the middle castes started asserting their right to a share of the economic and political pie, the Subaltern culture developed from the 1970s onwards, slowly at first and, with the ossification of the Congress, more pronouncedly from the 1980s onwards. More and more states spun away from the Congress universe, through the coming to power of regional parties, mostly with pronounced family and caste ties. These parties also relied on the same formula of interchangeables-influentials-essentials. Inner-party democracy was a joke and the leader cult was propagated with renewed vigour right across India, from Kashmir to Kanyakumari and from Dibang to Dwaraka. The composition of interchangeables changed with the formation of new caste and religious alliances, with the promise of Utopia to groups which had suffered from disastrous governance and lack of access to basic human facilities. But the leader and her essentials still governed with the support of influentials. These influentials were virtually allotted jagirs which they could exploit like the zamindars of yore. The bahubali (strongman) phenomenon was aided by weak state capacity in public service delivery and the virtual absence of the rule of law. While the leader and her essentials milked the state coffers, the influentials resorted to extortion, kidnapping and murder to enforce their writ and extract economic rent.

We are now in the Treta Yuga of the BJP-Hindutva culture, epitomised by a strong leader and a fully subservient party structure. Retail corruption at the central level appears to have been phased out, though the same cannot necessarily be said for states under the control of the party. The power of the essentials at the centre has been curbed, at least for the time being, with decision-making centralised in the Prime Minister’s Office. Influentials have been accommodated with MP posts or with institutional sinecures. At lower levels of the district and small towns, influentials have been given latitude to demonise minority communities, employing the icons of pseudo-patriotism, the cow and women’s honour. This, it is hoped, will keep alive the influentials’ enthusiasm to mobilise the interchangeables to support a specific sectarian ideology.

With every new political party adopting one or more (or a mix) of the three cultures enumerated above, it is difficult to be optimistic about a new socio-political culture developing in the country. This is why, despite so much heat and light being generated on essential political and administrative reforms, my prognosis remains that:

  • effective Lokpal and Lokayukta systems will never see the light of day;
  • reforms in electoral funding will be half-hearted and opaque, designed to serve the interests of self-perpetuating politicians. In any case, corruption in the public space is related to basic human greed and not just high costs of contesting elections;
  • political functionaries will never give up their basic right to patronage, be it in procurement, transfers or resource allocation: the variation will only be in whether such discretion is exercised at a wholesale or retail level;
  • administrative (including police) reforms will receive only lip service since no political formation in India wishes to forego its royal prerogative to manipulate the official machinery to meet its partisan ends. The CBI (and also other investigative agencies like the Directorate of Revenue Intelligence and the Income Tax Department) will continue to be used to inconvenience political opponents and those with differing political views;
  • judicial reforms, especially in the criminal justice sphere, will be halting and piecemeal. No political outfit wishes to expose its essentials and influentials to rigorous scrutiny of the law and mutual back-scratching will allow “business as usual” to continue unchecked.

What does all this imply for the future of the inhabitants of India’s Animal Farm? The politician will continue her operations as always, untroubled by public opinion or by that inner voice that lesser mortals call “conscience”. The ordinary citizen will continue to trudge her way to the polling booth every five years, giving another chance to the incumbent or garlanding a new suitor in the fond hope that her lot will improve. And what of my former tribe of civil servants? They would be well-advised not to follow in the footsteps of Boxer, the faithful workhorse of Orwell’s Animal Farm, who was despatched to the slaughter-house as a reward for his unremitting and honest toil on the farm.

 

 

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Indian bureaucracy – a Kafkaesque drama

Nothing disturbed me as much in recent months as the news reports of the former Coal Secretary of the Government of India (and my former senior colleague in the Petroleum Ministry) facing prosecution in the “coal scam” case; he has now been convicted. As a Deputy Secretary in the Petroleum Ministry in the early 1990s, it may be appropriate for me to detail the travails an honest officer goes through when (s)he is required to make recommendations on major commercial decisions relating to mining rights for extracting natural resources to promote economic growth in the country. I draw on my experience in the petroleum exploration sector to highlight the pressures an officer goes through during such an exercise, given the system s(he) must work with.

The officer starts with the legacy of a socialist past, where natural resources extraction was solely the prerogative of the public sector. While (s)he may genuinely believe that opening the natural resource extraction sector to competition from the private sector will promote more efficient operations which yield dividends to the country, (s)he has to contend with hostility to such moves from influential sections within the government and legislature (both political and bureaucratic), not only because of fears of losing the powers of patronage, but also because of a mindset moored in outdated socialist economics, with little understanding of the economics of efficient economic processes. Add to this the heartburn in the public-sector enterprises of being stripped of their monopoly in the natural resource sector and you have a situation where the reformist bureaucrat/politician virtually comes up against a brick wall. We were genuinely lucky in the early 1990s of having had leaders in the political and bureaucratic set up who backed these reforms wholeheartedly. In more recent times, there has been a backlash against private involvement in the natural resource extraction sector, partly because of indifferent regulation of private producers, but also because the Indian intelligentsia has joined the rising global chorus against capitalism, regardless of its contribution to greatly improved living standards over most of the globe (including India) over the past quarter century.

The problem arises where the natural resource sector has not developed a bidding/auction system to choose among alternative bidders. The petroleum sector was lucky in this respect; petroleum secretaries in the 1980s presided over the development of competitive bidding systems, drawing on best practices in the international petroleum industry. The Coal Ministry was not so fortunate: with a behemoth like Coal India and with powerful political interests controlling patronage strings in this sector, there was little chance of allowing private sector participation in this sector.  Once Coal India fell short in meeting coal requirements of private industry, there was the inevitable clamour for permitting captive coal mining by diverse industries to meet their raw material requirements. The issue of allocation of coal mining blocks to private players is made more complicated by the fact that mining leases are to be granted by state governments. The petroleum sector has been more fortunate: the central government is the licensing authority for offshore petroleum blocks; where onshore blocks are concerned, state governments have not been involved in the process of selection of private operators but are only approached for grant of mining leases after selection of the private party by the central government through a competitive bidding process.

The Coal Ministry officials did make efforts, from 2004 onwards, to introduce an auction system for allotting coal blocks. The Law Ministry, after two years of to-and-fro consultations, covered its backside in 2006 by opining that the government could go in for auction/competitive bidding either by amending the Mines and Minerals (Regulation and Development) Act, 1957 or by effecting changes in the existing administrative instructions. Anyone who has worked in government will tell you that if the options are to go in for a tedious legislative process versus quick administrative action, the former will always win the battle, given that no one in government would want to be seen as hastening the entry of the private sector into a hitherto reserved sector. Given the snail speed at which decisions are taken by government, it is not surprising that it took eight years to get government approval for the auction process.   Since there was need to augment coal supply, applications for coal blocks from end users were considered, with recommendations from state governments, by a Screening Committee headed by the Coal Secretary of the Government of India. Once such a system is adopted, the element of subjectivity inevitably creeps into the decision-making process. The Screening Committee also had to rely on information provided by Coal India, other administrative ministries and the state governments in arriving at decisions on who should get the coal blocks. It is here that the Coal Ministry bureaucracy fell afoul of the Comptroller and Auditor General of India (CAG) and the Central Bureau of Investigation (CBI), two deadly Cs that are feared by the bureaucracy, often for their limited understanding of the nuances of economic decision making. Not only does the CAG lack expert domain knowledge of the sector it is auditing, there is also little comprehension of the peculiar requirements that necessitate specific business decisions. I can point to specific CAG conclusions in the audit of oilfield operations that have drawn derisive comments from oil industry insiders. The CBI, of course, has developed the process of endless investigations into a fine art, leading the highest court of the land to wonder if it was a “caged parrot”.

More problematic are the issues a bureaucrat faces even after a bidding process has been followed. Most officers in government, especially those in the Finance and Law Ministries, are blissfully ignorant of the complexities of the financial and legal issues relating to natural resource extraction. Getting a proposal to grant mining rights to a private investor approved right up to the level of the Union Cabinet is an exercise that would tax the abilities of a Hercules. Innumerable trips to North Block and the upper floors of Shastri Bhavan later, the anxious bureaucrat (trapped between the Scylla of an inflexible bureaucracy and the Charybdis of the ire of his (her) political and bureaucratic bosses) wipes his (her) brow in relief when the all-important clearance of the Cabinet is received. More tension is in store as the contract must be negotiated and then vetted by the Law Ministry and the Internal Financial Adviser in the Ministry before it can be signed. In my time, this exercise could take anywhere from six months to a year.

The next stage of the steeplechase is the opprobrium heaped on the Ministry’s bureaucrats by those in the public sector, government and the political class who are opposed to private participation for ideological reasons or simply because their powers of patronage have been curtailed. Parliamentarians, especially from the left of the political spectrum, vent their anger by terming any such deal a “sell-out”, blissfully ignorant or dismissive of the economic arguments favouring the decision. It is at this juncture, a couple of years after the mining lease has been granted, that the CAG generally enters the picture. From my personal experience, the CAG officials examine the issue of private participation in mineral resource extraction from a very narrow, “tunnel” perspective. There are more than enough parties ready to cast doubts on the entire decision-making process. In recent years, the excessive media attention and the need to sensationalise every issue has led to public trials in nearly every natural resource sector. Most unfortunately, the CAG has a narrow auditor’s view of the subject and does not appreciate the compulsions under which the bureaucracy functions, rather surprising when one considers that this important constitutional functionary has himself gone through the same system till a couple of years earlier. To take the “coal scam” itself as an example, the CAG has found fault with the Ministry for going in for a screening rather than a bidding process. The then Coal Secretary and his subordinates have been hauled over the “coals” for acquiescing in the procedure followed of screening applications, notwithstanding what has been pointed out earlier in this piece of the efforts of the Coal Ministry bureaucracy to initiate the bidding process. I found it amazing that a former Cabinet Secretary, in a newspaper article, took the view that the Coal Secretary should not have agreed to the screening process. Given that there was no likelihood of an early resolution of the decision regarding the bidding process and given the need to step up availability of coal, the Coal Ministry bureaucracy probably took the only course of action possible under the circumstances, taking, in all cases, the approval of the then Minister for Coal, who, incidentally, was also the Prime Minister. Holding the Chairman of the Screening Committee responsible for the accuracy (or otherwise) of the information presented to him by other Ministries and state governments violates the principle of collective responsibility. In any case, as any bureaucrat can swear, it is well-nigh impossible to verify the correctness of every fact presented.

The final nail in the bureaucrat’s coffin is the entry of the courts and the CBI into the drama, which gives a truly Kafkaesque twist to the entire episode. Once the unfortunate man (or woman) has entered this chakravyuha, from which there is no escape, life is a series of courtroom appearances, punctuated by terms in prison. The tortuous legal processes ensure that the case(s) drag on for an inordinately long time, well into the bureaucrat’s retirement phase of life and sometimes after (s)he has passed on from this world. The present government’s decision to amend the Prevention of Corruption Act, 1988 (PCA) to exclude the all-encompassing sweep of the pernicious Section 13 (1)(d)(iii) of the Act has been criticised by high-minded corruption crusaders. This sub-section defines “criminal misconduct” inter alia as “while holding office as a public servant” obtaining “for any person any valuable thing or pecuniary advantage without any public interest”. This catch-all provision can be used to nail almost any action of a bureaucrat since every decision (even the sanction of a private school) will lead to pecuniary advantage for some person. It is regrettable that the fundamental judicial principle of mens rea, which is the most important determinant of guilt under criminal law, is given short shrift in the PCA. To their misfortune, the former bureaucrats of the Coal Ministry have fallen afoul of this travesty of a legal provision.

Harish Gupta and his former colleagues have been found guilty of not only criminal misconduct (under the PCA) but also of criminal conspiracy and cheating under the Indian Penal Code, 1860. No prior sanction of the Government of India under Section 197 of the Criminal Procedure Code was obtained as required under law. This, and other issues will, no doubt, be raised in appeal, but it is scarring for a bureaucrat, known for his rectitude, to have his reputation besmirched by imputations of such conduct, especially when he was implementing the executive policy in force at the time he was in office. For all the public impression that bureaucrats lead the life of maharajas, let me (as an ex-member of that tribe) emphatically state that most babus (as we are pejoratively known) are just about able to afford one post-retirement home and live off the pension. The honest bureaucrat has only the fig leaf of his (her) integrity to cover him (her)self, the rest of it, including his (her) hard work, impartiality and simplicity of living, having been torn to shreds in recent years, when there has been a virtual “French Revolution” effort by innumerable Madame Defarges to vilify the character of the bureaucracy and watch, with unctuous relish, as bureaucrats are dragged on tumbrils to the guillotine in the presence of a blood-thirsty public. It is in this context that the Prime Minister’s assurance to bureaucrats of support for their bona fide decisions, in his Civil Service Day address on April 21, 2017, lacks conviction. The former Prime Minister was the Coal Minister when Harish Gupta allegedly committed the “crimes”, but he has not uttered a word in support of his erstwhile beleaguered colleague. Not only that, he, and his political deputies, have got off without even a slur on their conduct. Who knows which bureaucrat of today will be making the rounds inside Tihar Jail a decade hence! It will not be surprising if the bureaucracy adopts the motto “each man to himself and the devil take the hindmost”. Little wonder then that, today, the offspring of politicians, film actors and businessmen follow their parents’ professions, while the well-educated, talented daughters and sons of bureaucrats become lawyers, IT professionals and academics. If the bureaucracy loses valuable human capital, we have only our systems to blame for it.