Making the Central Government More Manageable and Effective

May 28th, 2014
in Op Ed

by Ajay Shah, AjayShahBlog

For the government to work, cabinet meetings must work well. For a meeting to work well, it can't have more than 15 persons. That gives you a real meeting, a conversation, an argument. If big groups are assembled then people just do speeches at each other and nothing is accomplished.

Follow up:

Fragmentation of inter-related functions into separate ministries has hampered work. We have shiny electricity generation plants that haven't been switched on as there is no coal - this is the failure of cooperation between the Ministry of Coal and the Ministry of Power.

The US Cabinet consists of 15 ministries. The UK Cabinet has 22 members in all. In India, we have 33 ministers and then we have a long list of others who are cabinet members. The failure of the bloated Cabinet to work as a mechanism for arguments and planning has given rise to the proliferation of GoMs, and mini-Cabinet structures like CCEA, where the actual work gets done. These coping mechanisms have their own problems.

Why did we get a bloated cabinet structure?

  1. Operating a vast socialist State requires much more government. As we pull back the State from indiscriminate meddling to the narrow goal of addressing market failures, this requires fewer building blocks. As an example, when India's objective was to cut off trade integration into the world, we needed a big machinery in the Ministry of Commerce.
  2. Coalition politics gave us the pressure to invent more ministries, more ministers of state, etc. With that compulsion behind us, we can now come back to a tight and simple design. There is no reason to have a single Minister of State.

Once you start questioning the status quo, we see numerous opportunities for change, with ministries that don't need to exist, as Ila Patnaik has argued.  In some cases, all that's going on is an ownership function of a PSU - e.g. Steel (SAIL) or DFS (PSU finance companies). For these, all that's required is a mechanism with multiple holding companies that will perform the ownership/governance function. The British ran India from Raisina Hill and we don't require a whole lot more than that. A sensible compact design would consist of:

  1. Finance
  2. Home
  3. External affairs
  4. Defence
  5. Transportation
  6. Energy
  7. Justice
  8. Agriculture
  9. Commerce
  10. Labour
  11. Health
  12. Education
  13. Urban development
  14. Poverty alleviation

That would give a 15-man Cabinet including the Prime Minister. This would be a tight and coherent body that would be able to talk with each other in depth, coordinate and plan.

It would also generate improved leadership by the PM and accountability to the PM. In the field of management, we have a thumb rule: One person should not have more than 7 persons reporting to him. In similar fashion, if the Indian PM has an 80-person Cabinet, he almost surely knows nothing about what most of them are doing. In contrast, with this 14-person Cabinet sketched above, the PM would have the capacity to have a sense about what each minister is doing, which would generate enhanced accountability and thus performance.

Moving to such a compact structure requires carefully analysing all existing departments of government, shutting down some, placing PSUs into holding companies, and putting others under the above 14 heads.


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