Report No. 35041-IN


Reforming Public Services in India:

Drawing Lessons from Success

A World Bank Report

Acknowledgements

This report has been prepared by Vikram K. Chand. It has benefited from several technical papers commissioned directly for the study by Suresh Balakrishan (Making Service Delivery Reforms Work: The Bangalore Experience), Subhash Bhatnagar (E-Seva in Andhra Pradesh), Jonathan Caseley (Registration Services in Maharashtra and Karnataka), Prema Clarke and Jyotsna Jha (Education Reform in Rajasthan), Sangeeta Goyal (Comparing Human Development Outcomes in Tamil Nadu and Karnataka), Sumir Lal (The Politics of Service Delivery Reform), Rahul Mukherjee (Telecom Reform), R. Sadanandan and N. Shiv Kumar (Hospital Autonomy in Madhya Pradesh), E. Sridharan (Electoral Financing), A.K. Venkatsubramanian (The Political Economy of Public Distribution in Tamil Nadu), and N. Vittal (Anti-Corruption). In addition, this report has profited from papers commissioned for the Shanghai conference on “Scaling up Poverty Reduction,” SASHD for its work on “Attaining MDGs in India,” and the Water and Sanitation Program (WSP), New Delhi for its Voice and Client Power (VCP) studies initiative.

Pooja Churamani and Arindam Nandi provided research assistance for this report. Vidya Kamath provided administrative support. Helpful comments were provided by Shantayanan Devarajan, Chief Economist of the World Bank’s South Asia Region, as well as Shekhar Shah, Kapil Kapoor, and Stephen Howes of the World Bank. Peer reviewers for this report were M. Helen Sutch and Jose Edgardo Campos, both of the World Bank; Samuel Paul, Chairman, Public Affairs Center (PAC); and N.C. Saxena of the National Advisory Council.

Many individuals from several states, including officials, scholars, and activists spent time with the team sharing their views. Without their generous help, this study would not have been possible. We are particularly grateful to P. I. Suvrathan, Additional Secretary, Department of Administrative Reforms and Public Grievances, Government of India, and R. Gopalakrishnan, Joint Secretary in the Prime Minister’s Office for providing written comments on this report. We are also grateful to B.K. Chaturvedi, Cabinet Secretary, for hosting a seminar to discuss this report. In addition, we would like to thank the Planning Commission for organizing a presentation on this report to its members. The report has also been presented at seminars organized by the Lal Bahadur Shastri National Academy of Administration, the Indian Institute of Public Administration, as well as the Center for Policy Research (New Delhi) and an NGO, Initiatives of Change. The final report has benefited greatly from these discussions.

ABBREVIATIONS AND ACRONYMS

ABTO / Association of Basic Operators / KAS / Karnataka Administrative Service
ADC / Access Deficit Charge / KAT / Karnataka Administrative Tribunal
ADSI / AssistantDistrictSchool Inspectors / KRIA / Karnataka Right to Information Act
AIDMK / All India Dravida Munnetra Kazagham / KSRTC / Karnataka State Road and Transport Corporation
AIS / All-India Services / LSA / Lok Sampark Abhiyan
APM / Agricultural Produce Marketing Act, MP / MCC / Metro Customer Care
BATF / Bangalore Agenda Task Force / MCD / Municipal Corporation of Delhi
BCC / Bangalore City Corporation / MKSS / Mazdoor Kisan Shakti Sangathan
BDA / Bangalore Development Authority / MoEF / Ministry of Environment and Forests
BESCOM / Bangalore Electricity Supply Company / MoU / Memorandum of Understanding
BJP / Bharatiya Janata Party / MP / Madhya Pradesh
BMC / Greater Mumbai Municipal Corporation / MSW / Municipal Solid Waste
BSNL / Bharat Sanchar Nigam Limited / MTNL / Mahanagar Telephones Nigam Limited
BWSSB / Bangalore Water Supply and Sewerage Board / NAC / National Advisory Council
CARD / Computer-Aided Administration of the Registration Department / NGO / Non-governmental Organization
CBI / Central Bureau of Investigation / NTFIT / National Task Force on Information Technology
CBPS / Center for Budget and Policy Studies / NTP / National Telecommuncations Policy
C-DAC / Center for the Development of Advanced Computing / OCMS / On-line Complaint Monitoring System
C-DoT / Center for the Development of Telematics / PAC / PublicAffairsCenter
CGG / Center for Good Governance / PDS / Public Distribution System
CIC / Chief Information Commissioner / PGC / Public Grievances Commission
CICP / Computerized Interstate Check-posts / PHC / PrimaryHealthCenter
CM / Chief Minister / PIL / Public Interest Litigation
CNG / Compressed Natural Gas / PIU / Project Implementation Unit
COAI / Cellular Operators Association of India / PMO / Prime Minister’s Office
CPCB / Central Pollution Control Board / PRA / Panchayati Raj Act
CRC / ClusterResourceCenter / PRIs / Panchayati Raj Institutions
CRE / Customer Redressal Efficiency / PSU / Public Sector Undertaking
CSE / Center for Science and Environment / PTA / Parent-Teacher Association
CVC / Central Vigilance Commission / RAX / Rural Automatic Exchange Switches
CVO / Chief Vigilance Officer / RGSM / Rajiv Gandhi Shiksha Mission
DMK / Dravida Munnetra Kazagham / RKS / Rogi Kalyan Samiti
DoT / Department of Telecom / RPA / Representation of the People Act.
DPAR-AR / Department of Personnel and Administrative Reforms (Administrative Reforms) / SK / Shiksha Karmi
DRTI / Delhi Right to Information Act / SLA / Service Level Agreement
EC / Election Commission / SMC / Surat Municipal Corporation
ED / Enforcement Directorate / SR / Sub-Registrar
EDB / Electronic Display Board / SRO / Sub-Registrar’s Office
EGS / Education Guarantee Scheme / SSS / Sanvida Shala Shikshak
EPABX / Private Automatic Branch Exchange / STP / Sewerage Treatment Plant
FBAS / Fund-Based Accounting System / SWC / Single Window Cell
FOI / Freedom of Information Act / SWRC / Social Work Research Council
FPS / Fair Price Shop / TDP / Telegu Desam Party
GER / Gross Enrolment Ratio / TN / Tamil Nadu
GoI / Government of India / TNMSC / Tamil Nadu Medical Services Corporation
GoK / Government of Karnataka / TRAI / Telecom Regulatory Authority of India
GoMP / Government of Madhya Pradesh / TRC / Telecommunications Restructuring Committee
GP / Gram Panchayat / USO / Universal Service Obligation
HWSSB / Hyderabad Water Supply and Sewerage Board / VAO / Village Accountant Officer
IAS / Indian Administrative Service / VEC / Village Education Committee
IIM-A / Indian Institute of Management, Ahmedabad / VPT / Village Public Telephones
IIM-B / Indian Institute of Management, Bangalore / VSNL / Videsh Sanchar Nigam Limited
ISO / International Standards Organization / WDP / Women’s Development Program
ITA / Indian Telegraph Act / WHO / World Health Organization
ITC / India Tobacco Company / WLL / Wireless-in-local-loop
JP / Janpad Panchayat

TABLE OF CONTENTS

EXECUTIVE SUMMARY……………………………………………………………… / i
Chapter One : Introduction …………………………………………………………… / 1
Chapter Two : Promoting Competition ……………………………………………… / 7
India’s Telecom Revolution……………………………………………………………. / 7
Competition in Market Services to Farmers…………………………………………….. / 11
Chapter Three : Simplifying Transactions……………………………………………... / 15
Andhra Pradesh’s E-Seva Model ……………………………………………………...... / 15
Kerala’s Friends Program ………………………………………………………………. / 18
Computerization of Land Records in Karnataka ………………………………………... / 20
Gujarat’s Computerized Interstate Check-posts…………………………………………. / 24
CARD in Andhra Pradesh……………………………………………………………….. / 25
Chapter Four : Restructuring Agency Processes ……………………………………… / 29
State-Wide Agencies ……………………………………………………………………. / 29
The Registration Department in Maharashtra …………………………………... / 29
The Karnataka State Road and Transport Corporation …………………………. / 32
City Agencies …………………………………………………………………………… / 35
The Hyderabad Water Supply and Sewerage Board …………………………… / 36
Bangalore : Making City Agencies Work ? …………………………………….. / 38
Surat after the Plague, 1995-2005 ………………………………………………. / 43
Chapter Five : Decentralizing Teacher Management ………………………………… / 48
The Madhya Pradesh Experience ……………………………………………………….. / 48
Chapter Six : Building Political Support for Program Delivery …………………… / 57
Comparing Human Development Outcomes in Tamil Nadu vs. Karnataka, 1971-2001 / 57
Chapter Seven : Strengthening Accountability Mechanisms …………………………. / 64
Civil Service Reform : Transfers in Karnataka …………………………………………. / 64
Unveiling Secrets : Access to Information in Rajasthan, Delhi and Karnataka ………… / 67
Anti-Corruptions Institutions …………………………………………………………… / 72
The Karnataka Lok Ayukta ……………………………………………...... / 73
Strengthening the Central Vigilance Commission …………………………….. / 75
Public Interest Litigation ……………………………………………………………….. / 77
Chapter Eight : Lessons for Improving Service Delivery …………………………… / 80
Bibliography / 94

Boxes

Box 1 : Do Indian Voters Reward Performance? The Problem of Anti-Incumbency

Box 2 : Instruments and cases studied in this report

Box 3 : Gujarat’s Smart-Card Driving License

Box 4: Building Capacity for E-Governance: Andhra Pradesh’s Chief Information Officers (CIO) Program.

Box 5: The Role of Ideas in Reform in Madhya Pradesh

Box 6: Community Participation in Hospital Management: MPs Rogi Kalyan Samiti (RKS) Model

Box 7: Rajasthan’s Experience in Reforming Primary Education in the 1980s and 1990s

Box 8: Social Programs in Tamil Nadu

Box 9: The Tamil Nadu Medical Supplies Corporation (TNMSC)

Box 10: The Battle for Transparency: India’s Freedom of Information (FOI) Act

Box 11:Mumbai’s On-line Complaint Monitoring System (OCMS)

Box 12 : Reinforcing Accountability in Service Delivery: India and Latin America

Box 13 : TheMedia as a Source of Support for Reform

Figures

Figure 1 : Improvements in Overall Satisfaction, Bangalore, 1994, 1999, and 2003

Figure 2: Aggregate Satisfaction across Citizen Report Cards, Bangalore...... 39

Figure 3: Incidence of Corruption in City Agencies, Bangalore

Figure4 Gross Enrollment Ratio by Gender (Primary Schools in MP)

Figure 5: Teacher Absenteeism in India

Figure 6: Aggregate Transfer Data, Karnataka, FY 2000/01 to 2004/05

Tables

Table 1 :Average Tenure of MDs: Rural Women’s Development and Empowerment Project

Table 2 : Average Bribes Paid in CARD and Non-CARD Offices in Rural Districts

Table3 :Changes in MCC Performance (1999-2002)

Table 4 : Population Growth in Surat, 1971-2001

Table5 : State-wise Human Development Index: 1981, 1991, 2001

Table6 : Literacy Rates, Karnataka and Tamil Nadu, 1971-2001

Table 7 : Selected School Quality Indicators (Primary Schools), 1992-93

Table 8 : Selected Health and Demographic Indicators, 1971-2001

Table9 : Appeals under the Delhi Right to Information Act

EXECUTIVE SUMMARY

The Focus of the Report: Documenting Successes and Drawing Lessons

This report focuses on successful innovations in service delivery across India. The overarching goal is to identify common factors across cases that explain why these innovations worked. In addition, the report draws lessons from these innovations that might help improve service delivery across sectors and facilitate the transplanting of success stories to other settings. This study examines 25 cases where major reforms in service delivery occurred. The criteria for choosing these cases: All represent some form of institutional reform in service delivery; they range across a variety of sectors, making it possible to discern common threads in reform; there is evidence to indicate a positive impact on service delivery, including surveys, and/or recognition by a credible external organization of significant improvement; and they are stable initiatives in existence for at least two years or longer. In addition, the study examines six cases where innovations were attempted but with less success; these cases are woven into the report to provide some basis for comparison. This study classifies these cases according to six instruments used to improve service delivery: (1) Fostering Competition, (2) Simplifying Transactions, (3) Restructuring Agency Processes, (4) Decentralizing Teacher Management, (5) Building Political Support for Program Delivery and (6) Strengthening Accountability Mechanisms.

SOME SYSTEMIC PROBLEMS IN SERVICE DELIVERY

These successes have occurred, despite poor overall outcomes in service delivery and systemic problems that have yet to be resolved.

These successes have occurred in individual services and states, despite an overall context characterized by poor service delivery outcomes. A national survey of major public services (elementary schools, public hospitals, public transport, drinking water facilities, and public food distribution) by the Public Affairs Center (PAC) concludes that India has done well in terms of providing basic access to such services, but far less well in terms of ensuring their quality, reliability, and effectiveness.[1] A recent study by Transparency International found high levels of corruption in services as diverse as health care, education, power, land administration, and the police.[2] Progress towards achieving the millennial development goals has been slow.[3]

There are systemic problems that might explain why service delivery outcomes remain poor on the whole. The civil service is burdening by an expanding salary bill that has crowded out non-salary spending. Short tenures caused by premature transfers of officials responsible for delivering public services have undermined continuity. Capacity gaps exist in some areas – India, for example, has the highest absolute number of maternal deaths in the world, but only three full-time officers at the central level dedicated to the task of supervising maternal health programs.

The weakness of accountability mechanisms is a barrier to improving services across the board. Bureaucratic complexity and procedures make it difficult for the ordinary citizen to navigate the system for his or her benefit. The lack of transparency and secrecy that shrouds government operations and programs provides fertile ground for corruption and exploitation. Nor is civic pressure for change robust: A national survey conducted in 2001/02 revealed that only eight percent of all respondents were members of a civic association, while only two percent could attest to the presence of an NGO in their area working on the provision of public goods.[4] This finding is mirrored in another national survey conducted in 1996 by the Center for Developing Societies which found that only four percent of all respondents were involved with a civic association.[5] When the citizenry fails to organize around improving public services, politicians lack the incentives to take the issue seriously.

The lack of accountability in turn provides opportunities for corruption. India ranked in ninetieth place in Transparency International’s Corruption Perception Index (CPI) in 2005. Nor is the country well organized to combat corruption: A multiplicity of overlapping anti-corruption agencies, and dilatory legal processes for tackling cases, has made it difficult to bring the corrupt to book. India’s campaign finance regime also has potentially negative effects on service delivery: The unregulated cost of elections – and the lack of legitimate funding sources, including a system of public funding – has created incentives to extract rents from administrative functions, including the delivery of services, to fund campaign expenses or pay back contributors. Despite, these systemic problems, many innovations in service delivery have taken place in different sectors and states with positive results for citizens, as this report shows.

LEARNING FROM SUCCESS: KEY LESSONS

I. The Enabling Environment

(a) The Role of Political Leadership

The vision of the political leadership influenced the kinds of reforms pursued.

The first lesson that emerges from the cases considered in this report is the centrality of the political leadership in triggering service delivery reforms. In Andhra Pradesh, Madhya Pradesh, and Karnataka, reforms were frequently a product of the vision of leaders.[6] In Andhra Pradesh, the fact that the state was led by a politician with fascination for technology played a role in propelling e-governance reforms.[7] In Madhya Pradesh, the fact that the leader was committed to vision of governance based on community participation and decentralization clearly influenced the choice of reforms during his tenure in office. In Karnataka, the political leadership sought to transform Bangalore into a leader among cities, using Singapore as a model. At the national-level, telecommunications reform was pushed by the Prime Minister’s Office (PMO) as part of a larger developmentalist vision aimed initially at promoting technological innovation and then at strengthening India’s overall competitiveness in the global economy.

Bipartisan consensus across party lines facilitated reform; electoral incentives for change.

In Tamil Nadu, the Dravidian parties, which came to power in 1967, were deeply influenced by a common ideology, including the importance female emancipation, the eradication of caste distinction, reservations for backward groups, and family planning to promote development. Welfarist ideology emerged as a major ingredient of social policy in Tamil Nadu under both the DMK and the AIDMK in the post-1967 period. Electoral incentives also pushed both parties into supporting similar policies and programs. The defeat of the Congress Party in the 1967 state elections in Tamil Nadu over the issue of food scarcity convinced both the DMK and the AIDMK to create a social safety net through the adoption of a universal system of public food distribution and a noon midday meal programs for schoolchildren and other groups. In fact, the DMK and the AIDMK engaged in a process of active one-upmanship to extend the benefits of these programs to a wider set of beneficiaries. Opening up the marketing process for rural produce in Madhya Pradesh to private players was also an electoral winner because the move clearly benefited farmers at the expense of a small group of traders who controlled the official Mandi system. Programs designed to simplify citizen interaction with government, such as E-Seva and Bhoomi, were also supported partly with an eye to their popularity with voters.

Stable governments with a clear majority in the state assembly were better positioned to implement reforms.

If the ideas of leaders were important for service delivery reforms, political context mattered as well. The fact that Chief Ministers in Andhra Pradesh, Karnataka, and Madhya Pradesh enjoyed stable majorities in their state assemblies made it much easier to carry out reforms. In Tamil Nadu, the tradition of a strong Chief Minister in both the DMK and the AIDMK, coupled with the fact that no government has failed to complete its full term (with one exception) since 1967, made it easier to implement reform effectively.

(b) Politicians and the Civil Service: Patterns of Interaction

Empowering the civil service through stability of tenure, managerial autonomy, and high-level access to political decision-makers was a crucial factor in the success of reforms.

Chief Ministers committed to reform acted to empower their civil servants to deliver results. The message from these cases is that civil servants when properly empowered by politicians can be transformed into an effective instrument for innovation in service delivery.

Stability of Tenure: Almost all the successful cases studied in this report involved initiatives spearheaded by IAS officers who remained in their posts for at least three years and, in some cases, much longer. Conversely, initiatives that ran into difficultywere marked by great instability of tenure at the top fueled by political pressures to transfer civil servants whose reforms interfered with rent-seeking by powerful interest groups.