Home > Finance > View: How India can minimize the use of ‘discretion’ in public policy

View: How India can minimize the use of ‘discretion’ in public policy


Despite the economic reforms of the 1990s, the Indian economy remains heavily regulated. As a result, the ordinary citizen has to expend considerable time, money and energy unproductively merely to comply with a plethora of laws that govern him or her. Seven years after the current central government came to power, it has yet to take concrete steps to fulfil its mantra of ‘maximum governance, minimum government’.

Governor-general George Curzon attributed the complexity in India’s laws and policy to the complexity of the Indian mind. But it also resulted from the deep suspicion that the colonial rulers had of their Indian subjects. After Independence, the tradition continued, with the new Indian ruling elite replacing the old British one. In line with his vision of a new socialist India, Jawaharlal Nehru introduced stringent restrictions on imports, installed production capacities and foreign exchange.

Much later, GoI also sought to regulate the functioning of foreign companies and monopolies. These controls ware bad enough. But what made them insufferable was the vast amount of discretion the new policies granted to the bureaucracy.

In 1975, at the height of the licence permit-inspector raj, Robert Klitgaard, one of the world’s best known anti-corruption strategists, came out with his celebrated theorem on corruption. He identified reduction of discretion as a key measure to combat corruption. Corruption, he argued, increases when public servants are vested with greater discretion, and decreases when such discretion is reduced.

This simple formulation impacted regimes the world over. Slowly but surely, administrations began to shift from discretion to rule-based public policies. India was no exception. Inevitably, regulatory frameworks became much more elaborate as policymakers, in an effort to curtail discretion, began to provide for diverse outcomes. Ironically, instead of curing the vice of excess discretion, they exacerbated it.

In addition to the discretion legislation or policy officially granted to decision-makers, they now also got the discretion on how it should be interpreted. This tendency continues till today.

In India, this has had three harmful consequences. One, policies and legislation, mired in complex frameworks, create serious implementation problems. When a policy does not fit into the psychological routines or checklists a junior official creates for himself, he will distort it or interpret it to accord with his thinking.

Michael Lipsky reported this finding in his 1975 book, Street-Level Bureaucracy: Dilemmas of the Individual in Public Services. Apparently, officials at the cutting edge of the interface with the public — station house officers in police forces, tehsildars, income-tax officers, doctors, nurses — who often struggle with huge caseloads, ambiguous and conflicting goals, and inadequate resources, have little time or inclination to ponder over what policymakers intended.

When confronted with long checklists, they will choose what they want to implement, and what they don’t. Lipsky noted that because of the substantial discretionary authority exercised by these officials, the difference between government policy in theory and in practice could be substantial, and troubling.

Two, complex legislation is often framed without taking into account its impact on the citizen. His or her compliance costs may increase significantly if he is required to maintain more records, file more returns or hire lawyers and accountants to represent his case before different government authorities.

Finally, such legislation is bound to increase litigation. In India, in 2019, there were 60,000 cases pending before the Supreme Court, 44 lakh cases before the high courts, and over 3.10 crore cases in the lower courts. Complicated enactments encourage litigation and only add to this backlog.

The solution to the problem, it would seem, does not lie in over-regulation. The cumbersome rules governing foreign funds received by NGOs are a case in point. It is no one’s case that action should not be taken against entities that act against the national interest. But it is wrong to place a heavy compliance burden on all NGOs — especially to insist they must have an account with the

(SBI), Delhi, irrespective of where they are situated. After all, we do not consider abolishing the whole system of transfer of funds through cheques merely because few people issue fraudulent cheques.

Regulations should always be light, easy to implement and comply with. The official on the spot who implements them should be encouraged to take timely decisions when problems arise. We cannot get rid of discretion in public policy. But we can insist that it should be exercised transparently. Officials should be held accountable for the decisions they take.

Source link

TAGS , , , , , ,
Hi guys, this is Kimmy, I started LicensetoBlog to help you with the latest updated news about the world with daily updates from all leading news sources. Beside, I love to write about several niches like health, business, finance, travel, automation, parenting and about other useful topics to keep you find the the original information on any particular topic. Hope you will find LicensetoBlog helpful in various ways. Keep blogging and help us grow as a community for internet lovers.