The Make in India and Ease of Doing Business policies were framed because Prime Minister Narendra Modi correctly believed that the problems of poverty and unemployment could only be solved by the rapid growth of the manufacturing sector. This could not happen unless India changed from being a difficult country in which to manufacture and do business, to an attractive destination for manufacturing investment. A multitude of important and badly-needed reforms were implemented in pursuance of these policies. Despite these efforts, manufacturing has till now not shown any significant increase in its growth. Investments in the sector remain inadequate. Even taking into account Covid and global events, it is apparent that while policy intentions were excellent, their implementation has not yielded the intended results. Clearly, our implementation capabilities need to be more effective.
The development of strategies and plans for implementation and their execution is done by individuals. Repeated failures in this area point to the necessity of identifying the root causes for why existing personnel charged with policy execution have been failing. The reasons could be inadequate knowledge and skills, lack of motivation, environmental constraints or weak supervision and monitoring. While the political leadership lays down the vision, the responsibilities for translating these into ground realities are that of IAS officers. Most of the senior posts in the secretariats and districts are held by officers from the IAS. They are responsible for ensuring that subordinate civil servants are adequately trained and skilled, motivated and guided to deliver good outcomes. They create the framework of rules that constitute the environment for implementation. Therefore, if policies are to be more effectively implemented, IAS officers need to be better equipped.
The recruitment system for the higher civil services ensures high-quality entrants. However, that does not automatically mean good results when posted in jobs that require specialised knowledge and experience. They need to be properly equipped to work in the manufacturing sector. Achieving global levels of cost and quality competitiveness in the sector requires that officers working in areas relevant to policy-making in the central and state governments understand how laws, regulations and procedures impact the competitiveness of industry. They should specifically be aware of the various ways in which these add to or reduce the costs of manufacturing. They need to appreciate the importance of demand creation for enabling industry to achieve economies of scale and how the stability of policies is required for companies to make long-term investments. The importance of profits and the generation of internal resources for growth has to be understood. This is only possible if the concerned civil servants in the ministries have good domain knowledge of the manufacturing sector and appreciate that government and entrepreneurs have to work jointly and trust each other.
Can IAS officers do this work? When I was inducted into Maruti, I had no knowledge or experience in management, manufacturing or the car industry. I did have the benefit of having O Suzuki and others as teachers, and a long uninterrupted stay in the company. My example shows that IAS officers can deliver results if they are motivated, trained and allowed to work in the area of their expertise.
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While policies are largely made in Delhi, much of the implementation is done in states. Effective implementation has become complex because of our past history of only trusting the public sector and distrusting the private sector. Many of the laws and procedures were based on the suspicion of private-sector industrialists. Equally, the system of checks and balances, inherited from the British, is based on a distrust of civil servants and leads to implementers preferring procedures and correct paperwork over producing results. Civil servants are generally not private sector “friendly” when dealing with issues that have financial implications. This results in long delays, higher costs and loss of competitiveness.
So, how to equip IAS officers to become much more effective in dealing with the manufacturing sector as well as other areas of development? We need to reform our system of human resource development and bring it in line with the best global practices. I suggest that a wing be created in the Department of Personnel & Training, and its counterparts in the states. This should be manned by professionals in human resource development whose function would be to select officers on the basis of aptitude from the IAS and other services, and train them to frame and implement policies relating to manufacturing and industrial development.
The selection of officers could be made after they have completed around 10 years of service. Thereafter, selected officers would need to be trained and given postings that would enable them to gain more knowledge and experience. This could include secondment to selected private companies so that the officers could get actual working experience. They would then be better able to understand the finer points of competing in the marketplace. With trust now being placed on the private sector, it should be possible to select companies in different areas of manufacturing for this purpose without undue concern about officers being “corrupted”. Officers so trained should not be moved to other unrelated areas of work. Periodic evaluations could be made, again by professionals, to identify those capable of moving to the highest levels for making policies and strategies. The wing of the DOPT that will be entrusted with the task of making such selections, imparting skills and managing the career growth of officers should report directly to the Prime Minister. That would insulate it from pressures from various quarters.
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One reason why attempts to skill officers have not worked in the past has been issues related to promotions and postings. That has prevented the right man from being posted in the right job and the widespread perception that the IAS has failed in the area of economic development. This problem has to be resolved in the larger interest of nation-building. A system that exists in Japan, and was implemented in Maruti, was to de-link salary scales from job responsibilities. The most suitable person for a job is selected and his pay did not change upon assuming higher responsibilities, though his designation changed. Annual increases in pay scales and movement from one scale to another followed a different system. I am sure other ways of resolving this problem could be found. At this point, the priority has to be the acceleration of manufacturing growth and better implementation of other development plans.
The writer is chairman, Maruti Suzuki
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