Decentralizing State Administration
CFD's proposal on September 2, 2006

Indian Government mulls to remove MPs from monitoring and vigilance committees: see below for news report October 23, 2006

Sankarshan Acharya
Pro-Prosperity.Com and Citizens for Development

I.  Components of Decentralized State Administration

  1. Allocate a state’s revenues with complete fiscal power to districts on per-capita basis and mandate that each district allocate its resources with fiscal power to its Panchayats, Notified Area Councils and Municipalities.  CFD had submitted a similar proposal with endorsements of Zila Parishad Presidents of Orissa in August 2004.  The Center has now veered its policies in this direction and is planning to reform the current system of governance accordingly.  The other crucial elements of decentralization are proposed as follows.
  2. Write new job contracts for all state government staff – including school teachers, college professors, engineers, doctors and bureaucrats like District Collectors, Deputy Collectors, Tahasildars and Block Development Officers, District Inspector of Schools and local police – now working in each district as employees of the same district to serve at the pleasure of the Zila Parishad (ZP).
  3. Each ZP will determine by a majority vote of its members which posts (such as Collector, Deputy Collector and Block Development Officer) it should keep or abolish from its payroll to optimize utilization of its scarce allocated revenues. 
  4. Each ZP, Panchayat, NAC and Municipality will have its own “local” police paid by its own resources.  The state will maintain its own “state” police force and vigilance department to help local police when called or to contain disturbance by local people and criminals that the local police cannot handle.
  5. The state will maintain its current office of Comptroller and Auditor General to audit for proper implementation of development projects and utilization of funds at local level. But the authority to approve, oversee and implement projects and to disburse funds will rest completely with local bodies with no interference whatsoever from state administrators, MLAs and MPs.
  6. Eliminate local area development funds of MLAs and MPs.  These funds are likely to make competing non-incumbent politicians engage in illegitimate means for funding and vote gathering. We should produce an independent report by a private auditing company to determine how much of the MP and MLA LAD funds have been used for real development of communities. We should also consider seriously public funding of political parties prorated on the number of votes polled during the latest election for existing parties and seed money for new political parties.  This will induce lawmakers (MLAs and MPs) to concentrate on policymaking in long-run interest of the State.  

II.  Benefits of Decentralized State Administration

  1. Refusal of state employees to work in a district will immediately stop.  Anyone not willing to work in a district will resign from his/her post in the district and apply for any vacancy in another district.
  2. Illegitimately usurped public resources meant for districts in unproductive (employment non-generating) real estate will no longer be concentrated in state capitals.
  3. Distribution of development is necessary for upkeep and betterment of Indian civilization.  We are now facing grave risks due to shrinking ground water table and polluted drinking water around most state capitals as well as New Delhi.  Let’s not forget that parts of Indian civilization perished under the current Thar deserts due to shortage of water.
  4. Distribution of resources to districts would also create concentration of resources in district head quarters (HQ).  This is more welcome than concentrating most of the resources in a state capital.  More importantly, however, a district HQ is closer to local people than the state capital is.  The ZP and voters of a district can more effectively interact with their own district administration serving at the pleasure of the ZP than they can now do with the current district collector (DC) or the CM who controls the DC.
    • The DC now operates almost like a viceroy of state administration to collect and often loot public and to siphon the development resources allocated to a district to the state capital. 
    • The current system is designed perfectly to not serve people. 
    • Former PM Mr. Rajiv Gandhi has said that only 15% of allocated resources reach their destinations! 
    • Only in the current system, for example, can the DC of Ganjam usurp 60% of the nicely reared live ducks from an agricultural farm to adorn his home pond!  If administration is decentralized, the farmer could mobilize voters to remove the DC or ZP president than act against a remotely entrenched CM or CS who remains pleased with DCs as long as the latter act like viceroys. How about another DC in Orissa who was nabbed by the people for looting BPL rice, as per news reports?  The CM merely transferred the DC and closed the case, as per news reports. 
    • The current system makes DCs beholden, not to people who bear the payroll, but to their neo-colonial lord – the chief minister – who takes for granted his term of incumbency as God-bestowed for self-aggrandizement and entrenchment.  
    • In the current system, the state administration merely distributes salaries, perquisites and privileges to control local administrators.  This makes local administrators subservient to the state bosses, not to the local people. But the local people everywhere in the state bear the entire burden of payroll, pension, perquisites, and pressure for kickbacks due to local administrators.  In addition, when the state/center borrows/creates money to pad the staff salaries, perquisites and privileges, then prices of all essentials everywhere rise.  The 92% of people in the unorganized sector who do not receive the newly created money pay higher prices and thereby bear heavy tolls for administrators who are not at all beholden to the real payers.  The current system perhaps makes the administrators unwilling or unable to understand that even the non-taxpaying masses bear massive tolls due to such price rise owing to sustenance of a nonchalant system of governance.  Non-taxpaying deprived masses and the squeezed productive citizens know the process.  They are turning angry.  Some of them join violent movements as they see no correction of the system.  This is posing the gravest threat to India.  The threat to our national integrity and security stemming from internal violence can be thwarted by the proposed Decentralized Administration. 
  5. For survival, the local administrators - controlled by the state level bosses under the current system - are tacitly impelled to usurp allocated resources or kickbacks from public.  Local administrators under new service contracts in the proposed Decentralized Administration will serve at the pleasure of local elected bodies and so will automatically serve the best public interest.   
  6. The state administrators in the current system (not beholden to locals) keep reshuffling endlessly the local administrators to make them comply with tacit rules for collecting/usurping allocated resources and for squeezing productive and creative citizens.  In some states, officials are transferred even before they have moved to their new offices as per previous transfers. Such brazenly irrational transfers by state level bosses as practiced to settle scores under the current system will stop if administration is decentralized.
  7. The current system is perfect to sink, for example, about Rs.4000 crores in a few KBK districts of Orissa while the poverty rate there rises significantly along with increased malnourishment and illiteracy.  Such gross destruction of capital will stop if administration is decentralized.
  8. Creation of such massive amounts of money causes no development but inflates prices of unproductive real estate in state capitals.  Inflated real-estate prices make it unbearable for the productive and creative talent to survive, let alone contribute to exports that are needed to keep rupee stronger to not impoverish Indians due to a falling rupee. 
  9. Concoction of media stories designed to suppress the truth will be contained when the public can learn on their own the shenanigans of their local administrations from proximity.  The so-called journalists are now given state government quarters and other largesse, to deceive people through concocted stories.  Decentralized administration will contain the deception of locals as the latter will more easily see the allocated resources and plans for investment by local officials under their control.  Local administrators cannot easily manipulate the truth by bribing journalists.  In fact, there should be a ban on allotment of government quarters to so-called journalists. 

III.  Costs of Decentralized State Administration

  1.  Under Decentralized Administration, current usurping administrators at the state level and the cronies they foist on locals will lose immensely.  But no current honest and efficient official will lose.  They will have an opportunity to serve the public better. 
  2. Decentralized Administration too can create new usurpers at the district and Panchayat level.  But because voters are closer to ZP and Panchayat Office than to a state Secretariat, they can organize themselves faster to replace the erring staff more effectively and efficiently.

IV.  Conclusions

The proposal for Decentralized Administration in states is still imperfect.  But it is far better than the current system where 85% of the newly created money is lost to ground zero in unproductive real estate.  More seriously, the proposed policy will create new employment everywhere.  Employment of especially creative and productive people will dissuade them from joining violent movements or emigrating India.  This will make the nation more productive, stabile and secured.  As more and more productive and creative people are engaged, our exports will improve to strengthen rupee to enrich all.

Sankarshan Acharya     

Founder, Citizens for Development and Pro-Prosperity.Com

Pro-Prosperity.Com is rated as number one by Google based on search for information on (i) optimal governance, (ii) optimal prosperity, (iii) safe banking for prosperity and (iv) universal religion and god.

Rural Min may take away monitor badge from MPs
Daily Pioneer, October 23, 2006
Akhilesh Suman | New Delhi

In a move that is likely to distress law makers of India, the Rural Development Ministry is mulling the removal of MPs from district committees meant for vigilance and monitoring of rural development programmes.

These committees were constituted in October 2004 with the purpose of overseeing the implementation of the ongoing rural development programmes. As per the Ministry guidelines, local MPs act as chairpersons of these district vigilance and monitoring committees.

A review of the performance of these committees by the Ministry revealed that after presiding over inaugural meetings, most MPs did not paid adequate attention to their assigned tasks.

"These committees are also to effectively liase and co-ordinate with the Ministry of Rural Development and the State Governments to ensure that all schemes are implemented," the guidelines say.

For the 604 districts in the country, there should have been 4,832 meetings of these committees, but only 656 meetings could take place till date - and that too in 384 districts. In many cases, only one introductory meeting was held and in only 178 of these 384 districts some follow up meetings were held.

Ironically, the decision to make MPs head the district committees was taken in response to complaints from the MPs themselves, who alleged that the district administration kept them out of planning and executing development programmes in their areas.

But consistent neglect by the public representatives of their duties as heads of these committees has forced a rethink in the Union Rural Development Ministry. "It is like a mini assembly at the district level, where an MP can ask how the flow of fund to the rural areas is being utilised," said a Ministry official. As heads, the MPs have to call meetings every three months and every official, including the district magistrates, has to comply with their directives.

As offshoot of the MPs lack of interest has been their reluctance to raise related issues in Parliament. "The number of questions on MORD has drastically come down as the MPs are themselves not doing what they are expected to do," an official complained.

"We are thinking of other ways to tone up the functioning of these committees. One of the suggestions under consideration is that chairing of these committees by MPs should not be mandatory but be by an appointee of the Ministry," the official added.

"Social auditing and strict vigilance by monitoring committees would act as a deterrent in committing irregularities. I have not been reported any political interference in rural development programmes till date, but what we are still awaiting is positive intervention by the public representatives and my colleagues in Parliament," Rural Development Minister Raghuvansh Prasad Singh told The Pioneer.

Sources say the Ministry may consider shifting the chairmanship of the vigilance and monitoring committees to some eminent personalities, while keeping the provision of the local MPs and MLAs being members of the committees intact.

However, before it modifies the present guidelines, the Minister wants to talk to the MPs directly. He has asked the Ministry officials to organise a conference of MPs on the specific issue of their involvement in the rural development activities. The proposal has been sent to the expenditure finance committee (EFC) to assess the expenditure involved in the exercise.

If the move doesn't take off, the Minister might demand a two-day discussion on the issue in the Winter session of Parliament.