Establishing a business in India can be challenging as there are numerous regional cultural phenomena that a company needs to familiarize itself before entering the Indian market. However, the one that stand outs and has a substantial impact on the businesses is the Indian bureaucratic system. A Hong Kong based group had declared India’s bureaucratic system as one of the world’s most stultifying system (http://www.bbc.com/news/10227680/). The challenges posed by the bureaucracy are one of the major hurdles for foreign investors, according to a survey. Any foreign corporation that plans on doing business in India, needs to consider and understand the bureaucratic aspect of it. Therefore, companies need to be certain that its employees can accustom itself to India’s ‘bureaucratic’ style of working
The Indian bureaucracy has a long tradition of history which has changed over the past 150 years. However, the many aspects and assumptions that were formed, as the underlying groundwork on which the bureaucracy is based, have been uniform and undisputed. To better understand the nature of the current state of Indian bureaucracy, it is crucial to examine its origin and development over the last century.
The origins of the bureaucracy in India can be traced back to the mid-nineteenth century, when the power was ultimately transferred from the East India company to the British crown. The rule by the British crown in India over the next several decades (until 1947 when India got independence) was often called as the British Raj (oxford dictionary reference). During the British Raj, the British rulers introduced new form of system wherein government and administration structure in India were shifted from monarchical form to a bureaucratic hierarchical structure (similar to the British civil service system). In this hierarchical structure, the king or queen was at the top of the pyramid followed by the Viceroy and Secretary of State who further ruled India via officers, aka bureaucrats. The key purpose of this change was to impose a rigid and centralized administrative structure wherein the bureaucrats’ main task involved collecting revenue, judiciary and upholding the law (http://shodhganga.inflibnet.ac.in/bitstream/10603/52025/6/06_chapter%201.pdf). The same thing is still prevalent in Indian civil service system, wherein bureaucrats are looking for ways to exploit the public by finding. Whereas completion of activities related to welfare and infrastructure development are less prioritized and take place at a slower pace. The British rulers established the bureaucratic structure in such a way where the bureaucrats were not accountable to the citizens, but rather to their superiors in the hierarchy (i.e. members of the British government). Similar concept is prevailing in the present bureaucratic structure as well, however the only aspect that has changed is that now the bureaucrats are to be reported to the (temporary) ministers in charge. The positions within the bureaucratic system are sought after as they are considered prestigious that provides the holder of it with power, status and money.
The second world war was a pivotal moment as during that period more Indians were accepted into the Indian Civil Service (ICS). The British bureaucrats could not effectively control and administer India as their priority at the time was to deal with catastrophic situation caused by the war. Adding to their woes, there was increased pressure from the Indian freedom fighters. To cope with this issues, the British rulers decided to employ more Indian bureaucrats in India’s administrative system. Moreover, as greater autonomy was provided to lower level provincial governments, allowing more Indians to have more power (as majority of jobs in provincial governments were filled by Indians).
When the independence from British rulers was within the sight, the leaders of the Indian National Congress (INC) were facing a critical issue. A decision had to be made whether to retain the bureaucracy structure created by the British government or to establish a completely new administrative system after eradicating the current one. After intense and long discussion between the INC’s leaders, a collective decision was taken to uphold the existing bureaucratic system to avoid chaos in independent India (reference). Furthermore, the idea of forming a new administrative system and establishing it over night was unrealistic and impractical. Hence, it was necessary to continue with the existing British system.
Numerous elements and characteristics from British government’s bureaucratic system is still prevalent to this date. Firstly, the past bureaucratic system advanced suppression and repressive actions that would inhibit the development of living standards in India. Same thing is happening now. Secondly, during the British Raj, the ICS officers (or bureaucrats) were powerful with responsibility of protecting the interests of the superiors. The same thing happens now wherein the current bureaucrats protect the interests of the ministers above them. In both eras, safeguarding the citizens’ interests is considered unimportant. But rather their aim was to uphold law and order and protect their superiors’ interests to gain their acceptance. In past, the British considered the bureaucrats to be their puppets whereas now the ministers and high officials consider bureaucrats to be their puppets. Thus, the ministers provided the bureaucrats with the power to ensure their personal interests are withhold, making the bureaucrats the dominant section within the administrative system.
Hence it is evident that the modern Indian administrative system has inherited plenty of features from the British administrative system. A major modification has been the increase in power and responsibility the bureaucrats have been provided post-independence. Paraphrase à Since the bureaucratic structure continued to expand and to grow into a large scale organization. In the process of its growth, the bureaucracy developed a highly organised structure and a set of values and norms determining bureaucratic behaviour.
Paraphrase à “Bureaucracies with the appropriate systems and procedures in place are thought to be more capable of governing society. It brings order out of Chaos by imparting stability to the administrative affairs, specifically, of countries, which suffers from frequent political instability. Bureaucrats are expected to be efficient, rational, impartial and neutral in their dealings and in the implementation of government policies”.
The Indian bureaucracy has often been criticized due to its sluggishness in reacting to its external environment. The Indian bureaucracy is very slow in implementing the policies created by the government establishments. There are numerous reasons that contribute towards this bureaucratic inertia that India is experiencing.
Paraphrase each line
· One of the major problems is the Indian constitution and its highly regulated nature. The constitution is extremely lengthy consisting of many loopholes. These loopholes lengthens the process. There is limited access to government offices, too many cumbersome forms to fill, lack of coordination between government departments in processing forms, long periods of waiting for approvals, and ‘screwy’ rules. On other hand, since the new Industrial policy of 1991, the rigid regulatory mechanism has been relaxed and most licensing procedures have been abolished. The introduction of a number of single window clearance bodies in government offices have considerably reduced the ‘maze’ that a foreign investor would have to go through in the past.
Bureaucracy is heightened due to different laws and regulations in different states
· Movement of parts between states is complex in terms of easiness of local tax and administrative procedure. Another factor that affects the level of bureaucracy is the state in which the investment is carried out. Bullis (1998, p. 21) says that policies aimed at attracting investments vary in strength and nature from state to state. Central government’s calls for reforms do not necessarily permeate uniformly across all states and down to lower government levels. At lower levels, there is no sense of urgency. The state/centre relationship is important, as under the last BJP government there were cuts in state funding which forced some states to introduce their own regulations to retain investment and raise capital.
Intensity of bureaucrats sluggishness depends on industry as well
· type of industry seems to be a major factor in determining the number and intensity of bureaucratic hurdles. Nationalistic politicians desire investments from high-tech, value-added firms and are opposed to the entry of such consumer-oriented companies as Heinz, Kentucky Fried Chicken and Kellogg’s, believing that Indian brands can satisfy the Indian market. Infrastructure and technology related areas such as architectural services face less bureaucratic hurdles. we did not experience much bureaucratic hurdles because our skills are in demand. The Government has targeted specific industries to attract investments. These examples suggest that where the industry of the overseas investor is seen to add to India’s economic capacity and fits into the government’s broader economic strategy, there is a greater chance that it will be able to operate free of bureaucratic and other hurdles.
The informal features and the norms
· The theoretical framework advanced here calls explicit attention to the informal features of the state that determine the quality of governance. Within bureaucracies, norms shape the commitment of public officials, their propensity to engage in collective behavior, and the actions they deem appropriate in carrying out their duties. Bureaucratic norms provide standards and guidelines to determine which actions are permissible, mandatory, or prohibited. Norms shape how officials interpret and apply rules and procedures in practice. India’s bureaucracy has a multitude of rules which are open to different interpretations. In long run, excessive bureaucracy could be the greatest barrier, by undermining India’s capability to materialize investor interest. Bureaucratic norms operate indirectly through their influence over civic participation. Norms guide how public officials relate to citizens, civic agencies, and other non-state actors. Non-state actors, meanwhile, learn to adjust their expectations and behaviors based on their prior experiences with public officials. It is through the mechanisms of bureaucratic behavior and civic action that norms influence policy implementation.
Self interest of the bureaucrats / also the fact that they give themselves a lot of importance
· It is quite inconceivable that they will get the high salaries and allowances that are paid to them today. The new India must be served by earnest efficient workers who have an ardent faith in the cause they serve and are bent on achievement, and works for the joy and glory of it, and not for the attraction of high salaries. The money motive must be reduced to a minimum.
· The maladies from which bureaucracy most frequently suffers are an excessive sense of self – importance on the part of the officials or an undue idea of the importance of their office, and indifference towards the feeling or the convenience of individual citizens.
Blames the system
· Perhaps the most impractical feature of India's parliamentary system is the practice of appointing legislators as ministers. Legislators are elected by the people to devise solutions to social problems, not to become administrators themselves. Almost always they have no experience or skill in the area of their ministry. To expect them to deliver quality in this age of specialization is simply absurd.
· This defeats the bureaucrats' primary purpose of providing non-partisan and efficient administration. They spend more time dealing with the goings and comings of politicians. They have the absurd task of training their bosses, and going along with their politics. The authority granted to the politicians makes patronage, not performance, their fastest path to advancement. With no scrutiny from any other branch of government, the two become cohorts in corruption.
· The lack of independence of the top bureaucrat behind India's monetary policy has been a problem from the very beginning. From the time of Nehru, RBI governors have had to do what the government wished. The truth is India's bureaucracy is affected, like everything else, by India's poor political system. This system has fundamental weaknesses — fusion of powers, sole appointing authority, making ministers out of politicians, no legislative oversight, vote bank politics, reservations — that hurt our officials' performance. Such structural defects cannot be fixed by tweaking, or by lecturing our bureaucrats.
Improvements to be made/ or are being made
· The enactment of Right to Information Act (2005) and trend towards more such enactment, viz., Whistle Blower Act will go a long way in heralding a new era of administration. Similarly according constitutional status to Panchayati Raj institutions is likely to bridge the gap between people and administration.
The, inefficiencies and lack of communication caused by bureaucratic delays result in low businesses growth rate. Furthermore, as the power rests in the bureaucrats, setting up a subsidiary and commencing a business in India can be extremely hard and complicated process.
Interview
– Talk about loopholes in the constitution –> delaying the process
– Lack of coordination between government –>
– Basic example → driving licence
– Perception that bureaucrats have power → they want to demonstrate that they are powerful
– Connections may help fasten the process
– Corruption is openly talked → embedded in every aspect of an ordinary Indian’s life → it is viewed as a way of getting things done faster
– Bureaucrats pursue self-interest –> leading to inefficiencies à