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Home > Archives (2006 on) > 2008 > April 5, 2008 > Opening the Floodgates of Corruption

Mainstream, Vol XLVI, No 16

Opening the Floodgates of Corruption

Monday 7 April 2008, by Bharat Jhunjhunwala


The Sixth Central Pay Commission has recommended implementation of a Performance Related Incentive Scheme to reward good employees and improve the quality of government work. Government departments will be allowed to retain one-half of the savings made by them as bonus to their employees. Say, the Public Works Department is spending Rs 1 crore a year for the maintenance of a particular road. It manages to do the same work in Rs 50 lakhs. One-half of the savings of Rs 50 lakhs will be distributed among the employees as performance-related incentive. This scheme is full of pitfalls because it is difficult to estimate the savings that are made. It is possible for the officers of the PWD to put less tar coal on the road, ‘save’ Rs 50 lakhs and distribute Rs 25 lakhs among them as incentive! Previously the officers sold the tar in black and faced the danger of being apprehended. Now they can appropriate the same amount legally!

Further, the scheme has been made optional. Para 2.5.11 of the Sixth Pay Commission Report states:

Voluntary adoption of PRIS at the departmental level and below...will allow flexibility and directness of rewards linked to the changes in the work processes...

This implies that inefficient departments that need performance audit most can opt out of the scheme. Government employees are doubly benefited in this dispensation. They can opt into PRIS if they anticipate savings due to some reason; and they can opt out if they have more to gain from corruption.

The final impact of flexibility and delegation depends upon the personal objective of the concerned officers. The police will use flexibility to increase their weekly extortions if their objective is personal gain. This was the message of the famous play Ghasiram Kotwal. The cruel Kotwal was honest and efficient. In the result he chopped off the hands of an innocent person whom he suspected to be involved in a theft. One contractor told this writer that his truck was seized by the police authorities for illegal lifting of sand from the river bed. He paid a bribe of Rs 8000 and had his truck released. He stopped lifting sand thereafter. The SHO of the Police Station then sent repeated messages to him requesting him to start lifting sand—after making payment to the SHO. Flexibility to such SHOs will only lead to more corruption and tyranny. These officers will be able to legally claim ‘savings’ in addition to the bribes. The Pay Commission has opened a window to legalise corruption. Officers can now manipulate works and appropriate the ‘savings’ legally!

THE Commission makes it appear as if it advocates external and independent review of such performance. It is said in Para 1.2.2:

The PRIS recommended by this Commission envisages a (reward) for higher performance that would be judged by... an external independent agency.

This was in the right direction. An external agency will be better able to assess whether the savings made in maintenance of a road are due to higher efficiency or poor maintenance; and whether higher receipts of sand are due to efficiency or police tyranny. Alas! The need for external and independent assessment of performance is undone later in the report. It is said in Para 2.5.25:

Independent evaluation of deliverables, service quality and stakeholder satisfaction with performance by external agencies should be considered... Employee input should also be included as a necessary part of the evaluation process.

Look at the quote closely. Independent evaluation should be ‘considered’ while employee input is ‘necessary’. In other words, independent external evaluation is not essential in the Commission’s framework. The Government employees would be within the parameters set by the Commission in themselves determining the savings and in appropriating them.

The Commission has actually de-linked salaries of government employees with performance though it is pretended otherwise. Para 1.2.23 says:

The Administrative Reforms Commission is presently functional... Thereafter, the Government had also constituted the Expenditure Reforms Commission. While the issue of increasing productivity, efficiency and a result oriented approach... has been addressed in the Report, the Commission has refrained from making comprehensive recommendations on the issue of organisational reforms.

There are two components to this argument: how to bring in administrative reforms; and how to link salaries of government servants with performance. The Pay Commission was justified in not dwelling into the former task of making a roadmap of administrative reforms as that was the mandate of another Commission. But the Pay Commission had the solemn responsibility to work out ways to link the existing salary of government employees with their performance. The Commi-ssion says this has been done through PRIS. But this is only one-half of the story. The absence of punishment for underperformance implies that the Pay Commission condones the same. In the result, the Administrative Reforms Commission will not dwell into this issue because it is outside its scope; and Pay Commission will not dwell into this issue because Administrative Reforms Commission is looking into it!

Incentives alone will not bring about a change in the way our government works. Both carrot and stick are required to tame the horse. Bhishma says in Mahabharata that fear of punishment holds people in the path of righteousness. Kautilya says in Mahabharata that spies should be appointed to watch the conduct of government officers; and again spies to should be appointed to watch upon the spies. The Manu Smriti says:
Mostly government employees snatch the wealth of others and deprive them. The king should protect his people from them.

The import is that incentives alone will not suffice—it is simultaneously necessary to punish the wrongdoers. But the Pay Commission washes its hand from solving this vexed issue. Para 2.5.27 says:

Performance indicators... indicate whether services have improved or declined... They help identify... underperformance. Underperformance would also have to be addressed and resolved specifically.

The Pay Commission maintains an eerie silence on how this ‘resolved specifically’ will be done? It passes the buck of meting out punishment to the corrupt and underperformers to an unspecified and unknown entity and creates a façade as if it has sought to create efficient government. The corrupt and inefficient have nothing to fear, courtesy the Sixth Pay Commission.

Prime Minister Manmohan Singh had said immediately after taking oath that reform of governance would be his top priority. He deserves kudos for bringing in the Right to Information Act. In the same spirit he should reject the Pay Commission’s ‘incentives only’ approach. Instead he should consider the following. One, institute a separate spy agency that would on its own initiative trap corrupt government officers. Two, provide for capital punishment for corrupt government officers as done in China. Three set up an independent agency to send confidential questionnaires to the customers of all government departments and solicit the public’s views on the integrity and efficiency of each employee. Those rated high should be given increments and those rated negative should be given decrements. Such an approach will undo the damage wrecked on the country by the Sixth Pay Commission.

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