It has been often argued that the government of India is over-sized and it acts as a drag on the economic efficiency and growth. Critically evaluate.
The Indian government is considered as over-sized and bloated by a majority of people. A former chairman of the erstwhile planning commission acknowledged that around 80% of planning money went to the salaries of government employees.
Impact on economic efficiency & growth:
- It creates incentives for the culture of red tapism, which gives scope for corruption.
- Large fiscal scope of government is required to meet salaries and ‘crowding out’ of public sector.
- It is well known fact that the most resistance to LPG reforms have came from bureaucrats.
- Vested interests of bureaucracy also created hurdles in privatization reforms.
- Presence of various departments and autonomous bodies & regulators, create inconsistency and uncertainty.
But not every department is bloated. The Baswan committee pointed out the level of vacancies at higher levels.
- Right sizing – Restructuring, Reorganization, Cooperatization.
- Decentralisation and devolution.
- Greater use of ICT and e-governance.
- ‘Agencification’ within departments to improve expertise and coordination between departments.
- Lateral entry at higher levels.
Thus, for minimum government and maximum governance, we need right sized, proactive, modern and future ready bureaucracy.