An analytical overview of the institutional foundations of the world’s largest democracy.
While a growing private sector and a vibrant civil society can help compensate for the shortcomings of India’s public sector, the state is—and will remain—indispensable in delivering basic governance. In Rethinking Public Institutions in India, distinguished political and economic thinkers critically assess a diverse array of India’s core federal institutions, from the Supreme Court and Parliament to the Election Commission and the civil services.
Relying on interdisciplinary approaches and decades of practitioner experience, this volume interrogates the capacity of India’s public sector to navigate the far-reaching transformations the country is experiencing. An insightful introduction to the functioning of Indian democracy, it offers a roadmap for carrying out fundamental reforms that will be necessary for India to build a reinvigorated state for the twenty-first century.
About the Editors
Devesh Kapur is the Madan Lal Sobti Professor for the Study of Contemporary India and director of the Center for the Advanced Study of India at the University of Pennsylvania.
Pratap Bhanu Mehta is the president and chief executive of the Centre for Policy Research in New Delhi.
Milan Vaishnav is a senior fellow in the South Asia Program at the Carnegie Endowment for International Peace in Washington, DC.
Chapter 1: Introduction
Authors: Devesh Kapur, Pratap Bhanu Mehta, and Milan Vaishnav
This chapter outlines the analytical framework for the volume, situating the book’s inquiry of India’s institutional foundations in the larger context of the multiple transformations the country has experienced since 1947. The chapter then explicates the central themes that characterize the eleven institutions, or institutional clusters, examined in the book. In the penultimate section, it discusses five central elements of the Indian state’s struggle to transition from “old order” to “new order” institutions. It concludes by arguing that serious institutional reform is vital if the country is to build and sustain an Indian state for the twenty-first century.
Chapter 2: The Presidency
Author: James Manor
This chapter assesses the role of Indian presidents. At most times, they are legally required to comply with the formal “advice” of ministers. But in certain circumstances, they must act independently. This chapter discusses the varied approaches—assertive or restrained—of different presidents. It also analyses the remarkably broad freedom that presidents often enjoy from historical precedents. The chapter concludes with a detailed analysis of the devices which presidents may employ to maximize their room for maneuver, including one which has never been used (and has scarcely been recognized) but which could trigger a constitutional crisis.
Chapter 3: Parliament
Author: M.R. Madhavan
This chapter discusses the performance of the Indian Parliament. It looks at the main functions of Parliament—making laws, holding the government accountable, sanctioning government expenditure—and the various procedures for exercising these functions. It discusses the design of these procedures and examines whether any changes can be made in order to improve their functioning. Finally, the chapter looks at some core structural issues that adversely affect the performance of parliament: the anti-defection law, lack of recorded voting as a norm, and limited resources for parliamentarians.
Chapter 4: The Supreme Court
Authors: Madhav Khosla and Ananth Padmanabhan
Over time, the Supreme Court of India has evolved from being a court of law to a major institutional actor in the political arena. The present chapter analyses this transition by directing external and internal lenses on the court’s functioning. The external lens reveals engagement by the Court with legislative and executive domains of governance, and the current concerns of transparency and accountability that it faces. The internal lens scrutinizes the Court’s success as a court of law and its capability to streamline the judicial process such that the judicial system lives up to the legitimate expectations of the litigant public. Using the insights offered from these dual perspectives, the authors suggest important changes to the court’s functioning and a reorientation of its priorities that can render it a more effective public institution.
Chapter 5: Reserve Bank of India: The Way Forward
Author: Errol D’Souza
The Reserve Bank of India (RBI) was set up to conduct monetary policy, manage public debt and foreign exchange reserves, act as the government’s banker, and support the development of markets and financial institutions. This chapter reviews how the institution has fared on these various dimensions. It begins by examining the appointment process for the Governor and the monetary policy committee. Next, it assesses the importance of an independent debt management agency and consistency between debt management and monetary policy. The connection between monetary policy and macroprudential policy is discussed next. Large foreign exchange reserves may be viewed by government at some time as a source for a national investment fund. This requires the RBI to engage with government and to define the objective of reserves management. The RBI’s actions to improve the resilience of financial markets and its involvement with social and distributional goals of directing credit towards priority activities are also evaluated.
Chapter 6: Reforming India’s Institutions of Public Expenditure Governance
Author: Nirvikar Singh
Given the poor quality and effectiveness of much government expenditure in India, this chapter analyses ways of improving effectiveness through institutional reform. Improvements in outcomes include better targeting of redistributive measures and more efficient spending on productive projects. Four potential areas of institutional reform are: (1) improved functioning of individual ministries and departments, at the central and state levels; (2) better coordination across individual ministries and between the center and states; (3) reassignment of expenditure responsibilities across levels of government (center to state and/or state to local); and (4) reassignment of tax authorities to provide improved incentives for expenditure governance through electoral accountability. The chapter discusses each of these four areas, recent and potential future institutional reforms, and possibilities for implementing change.
Chapter 7: New Regulatory Institutions in Infrastructure: From De-Politicization to Creative Politics
Author: Navroz K. Dubash
This chapter examines the rise, design, and functioning of new infrastructure regulatory institutions in India, with particular attention to the process through which regulators are embedded in a local context. Regulatory performance is often benchmarked against an effort to insulate decision making from undue political influence by delegating powers to technocratic agencies. By this benchmark, regulators have been relatively unsuccessful. But conceptualizing the regulatory process as one to be re-made around technical rules is too simple; the Indian context requires regulators to constructively engage with negotiations that occur over regulatory decisions. For this reason, rather than atomistic agencies, “regulatory space” is a more appropriate construct through which to examine the regulatory process, with the judiciary and civil society as particularly important actors. From this broader perspective, regulatory outcomes are more diverse, particularly in their ability to create new spaces for creatively engaging politics.
Chapter 8: Institutions of Internal Accountability
Author: R. Sridharan
This chapter looks at reasons why the three major accountability institutions—the Comptroller and Auditor General (CAG), Central Vigilance Commission (CVI), and Central Bureau of Investigation (CBI)—have not effectively delivered on their mandate. The reasons lie as much in the overall institutional framework in which they have to operate as in their own internal structures, their history, and their legacy of past performance. The chapter recommends that the CAG would do well to position itself as a vital component of the mechanism to enforce the accountability of the executive to the legislature, and also submit itself to monitoring and accountability. The chapter sees merit in the recommendation of the Parliamentary Standing Committee to integrate all anti-corruption mechanisms under the new Lokpal.
Chapter 9: Foregrounding Financial Accountability in Governance
Author: Amitabh Mukhopadhyay
This chapter argues that the 21st century is witnessing a culture of accountability in-the-making. The mores of parliamentary supremacy are giving way to assertions of popular sovereignty. The Comptroller and Auditor General of India (CAG) is therefore peering out of the blinds of a restricted system of parliamentary financial control to re-design public sector audit as a service meant directly for citizens at large, not only for governments and parliaments. CAG's organization can demonstrate its relevance to citizens by developing the capacities to communicate with citizens through the media, support social audit mechanisms, conduct electronic financial audits, and inform the public discourse by means of research-oriented participatory performance audits. Wide public discussion to re-envision the institution and forge a new mandate for CAG is essential.
Chapter 10: The Civil Service
Authors: K.P. Krishnan and T.V. Somanathan
This chapter provides a comprehensive overview of the institution of the civil service, covering its initial design as conceived by the makers of the Indian Constitution and changes in that design. It makes an assessment of the effectiveness of the civil service as an institution against four criteria: preserving the constitutional democratic order, impartial implementation of the “rule of law” vis-à-vis citizens, faithfully translating the will of elected governments into policies while effectively implementing those policies, and promoting development (including efficient and effective public services). It explores the causes of the various shortcomings identified in the performance of the civil service and compares the Indian civil service with other countries on several parameters. It concludes with a detailed discussion of policy ideas on reform, drawing on Indian and international experience.
Chapter 11: Election Commission of India
Authors: E. Sridharan and Milan Vaishnav
This chapter examines the evolution of one of the world’s most powerful elections bodies, the Election Commission of India (ECI). Blessed with a legal status as a permanent, independent body under the Constitution, the ECI has used its broad mandate to develop wide-ranging powers to regulate the conduct and management of elections. A series of skilled leaders have further pushed the agency to undertake consistent organizational and technological innovation. In spite of this progress, the agency has struggled mightily to curb the twin influences of money and “muscle” in electoral politics. Unless the ECI is given more substantial legal authorities to address these challenges, the credibility of the electoral process will likely suffer. Legal ambiguity also makes the body vulnerable to political interference, although the multi-polar distribution of political power—coupled with widespread popular support and a sympathetic judiciary—mitigates this risk.
Chapter 12: Re-Energising Democratic Decentralization in India
Author: T.R. Raghunandan
This chapter describes the current status of democratic decentralization to local governments (LGs) in India. The political support for decentralization has been fitful and typically driven by a few champions. The transition to a system of LGs as autonomous spheres of government has been caught in limbo because administrative and fiscal arrangements have not kept pace with well-intentioned legal provisions. This has resulted in LGs that are burdened with a wide array of devolved functions on paper, but with little fiscal space and low administrative capability to execute these effectively. The earlier paradigm of top-down devolution should be supplanted by a demand-driven approach that incentivizes elected representatives from LGs to build a body of effective practice from below. Several interesting experiments in building collaborative knowledge networks and awarding local initiative might trigger the transformation that has eluded efforts made so far.
“This volume is a unique and illuminating study of India's public institutions. No other book gets to the bottom of India's governance deficits with the same combination of rigor and insight. It is essential reading for scholars, practitioners, and policymakers—not to mention ordinary citizens.”
—Arvind Subramanian, Chief Economic Adviser, Ministry of Finance, Government of India
“Transforming India's state from its current muddle to a high capacity state capable of addressing the challenges it faces is a pressing issue and there is no better place to start than with this hard-edges, clear-eyed edited volume.”
—Lant Pritchett, Professor of the Practice of International Development, Kennedy School of Government, Harvard University
“This is a multi-layered, exhaustively referenced publication, which surgically exposes the dark side of public institutional dysfunction. But it also provides sufficient evidence of institutional resilience, on which an enlightened political leadership can build. A must-have, for all those who either belong to, or wish to join, the frustratingly uplifting community of public institutional developers.”
—Sanjeev Ahluwalia, Business Standard
—Shashi Tharoor, Open Magazine
A Roadmap For Reforms
—Sarthak Bagchi, Book Review
While a growing private sector and a vibrant civil society can help compensate for the shortcomings of India’s public sector, the state is—and will remain—indispensable in delivering basic governance.
A discussion on the forthcoming book Rethinking Public Institutions in India, edited by Devesh Kapur, Pratap Bhanu Mehta, and Milan Vaishnav. The panel discussing the book included Arvind Subramanian, Jay Panda, Montek Singh Ahluwalia, Shailaja Chandra, and Yogendra Yadav.