Abstract

"Accelerating India's Development" holistically looks at India’s growth trajectory since gaining independence – it rounds up all where it has done well including unity, upholding the integrity of its constitution, retaining democratic values at its core. It also does not mince words to convey where all the nation has faltered such as falling short in delivery of public services including schools, healthcare, safety, and courts. The reasons for these shortfall are pinned on weak state capacities, where ‘inefficient and ineffective use of resources’ and not ‘want of resources’ impede. Consequently, there is a need to move from the traditional bureaucratic approach to a more agile model of governance where the ability and performance of the state apparatus matters.

The genesis of the change driving policy and programs at the state level stems from the "3i framework" -Ideas, Interests, and Institutions that work together to affect governance.  Even the best of beneficial ideas struggle to gain traction if these ideas are not aligned to the interests of powerful stakeholders, who often prioritize personal or group benefits over the public good.  Innovative ‘Ideas’ are born to address ‘Interests’ (of some or many) and ‘Institutes’ are crafted to fructify these ideas.  For instance, during India’s journey to freedom, the dominant ideology “of the people, for the people and by the people”, led to the adoption of democracy and birth of ‘constitution of India’ that changed Dominion of India into the Republic of India – as a result of which several institutes were curated.

While India had initially established robust institutions, however, over a period of time there has been a gradual corroding of their autonomy and effectiveness, which has substantially eroded state capacities too. A sizeable discussion is therefore dedicated to the role of institutions described as the "rules of the game" which govern and shape all interactions within a society. A comprehensive analysis of the crucial role institutions play in the development of a country is the mainstay.  Unquestionably, good ideas that have a vortex of social interests must be ‘sheltered’ and ‘delivered’ through formidable institutes that should boast of autonomy and efficiency. Unfortunately, the majority of the state institutes at present are encumbered with bureaucratic inefficiencies, inadequate capacities, corruption, and political interference. Therefore, there is an urgent need for reimagining of institutions to enhance their efficiency so as to not go out of tune with changing needs that seek both efficiency and creativity at the state level. Inspired by these thoughts , the present paper advocates for transforming traditional bureaucratic structures into more agile, innovative entities capable of addressing contemporary challenges effectively. For doing so, it proposes a prudent amalgamation of innovative tools and technologies to help states to respond better to the dynamic needs of their populations, ensuring that public services are delivered in a timely and effective manner. The study also insists that an informed decision-making can also be achieved through implementation of robust data analytics systems that can provide valuable insights and strategic planning ideas at all levels of government in areas that may need improvement. Consequently, the study not just proposes establishing newer institutions but also building up of data exchange Digital Public Infrastructure (DPI) to enhance data-driven decision-making at state level.

Background

It is widely accepted that the contemporary governance landscape has been shaped by post-independence socio-political dynamics as well as the legacy of colonial administrative structures. Understanding the evolution of state governance in India is critical in order to identify the root causes of current inefficiencies. Therefore, before proceeding, it is imperative to demystifying the complexities of state government functioning in India by revisiting its definition, responsibilities, and sources of funding as delineated in Indian constitution.

Apart from other references to Union Government and Parliament, Article 12 of the Constitution of India defines ‘State’ as encompassing the legislative and executive organs of the State Government, such as State Governments and State Legislature. Additionally, all local authorities fall under this definition, including municipalities (urban) and panchayats (rural), as well as district boards and improvement trusts. Furthermore, both statutory and non-statutory authorities are considered part of the State including the Commissions and Lokpal and Lokayuktas. As per the Seventh Schedule of the Constitution, there are sixty-six (66) subjects on which only the state governments can legislate such as Police, Public Health and Sanitation, Agriculture, State public services and so on. There are also fifty-two (52) items on the Concurrent List which both the Union and state governments can legislate such as Education, Forests, Criminal law and so on. The burden of these responsibilities falls on state institutions involved in both policy-making and implementation.

The State Secretariat serves as the central administrative unit of the state government, encompassing various departments such as Health, Home, and Education, each headed by a secretary. Directorates are specialized agencies under different departments, like the Directorate of Education (DOE). District Administration is led by the District Collector (DC), responsible for implementation at the district level, supported by Sub-Divisional Magistrates (SDMs) and Block Development Officers (BDOs). Specialized bodies include Public Service Commissions¹ and Development Authorities such as Delhi Development Authority (DDA) who focus on urban planning and development. Public Sector Undertakings (PSUs) such as State Housing Boards and State Electricity Boards manage essential services. Regulatory Boards like the State Pollution Control Board and State Food Safety Authority ensure compliance with regulations.

These institutions are established by state governments based on their specific needs and are integral to policy formulation and implementation and funded through various sources, including Own Tax Revenue (State GST, Taxes on Vehicles, Land Revenue, etc.), Central Tax Transfers (share of states in Central GST, IGST, Corporation Tax, etc.), Grants in Aid (from Centrally Sponsored Schemes, Finance Commission, etc.), Public Debt Receipts (market loans, issuance of special securities to Public Sector Banks), Public Account Receipts, and Non-Tax Revenue (dividends and profits from PSUs, mining receipts, etc.).

Despite such a clearly defined structure, roles and autonomy the lackadaisical performance of Indian state's in routine public service delivery such as education, healthcare, public safety, and judicial processes, has been empirically validated to be woefully inadequate in the literature (for instance , Chakrabarti, & Sanyal, 2015)². Even Muralidharan (2024)³ voraciously submits that Indian state performs well in "mission mode" (specific, time-bound projects) but struggles with everyday governance and service delivery. This weaknesses in public service delivery often stem from inefficient and ineffective use of resources rather than a mere lack of them and also because of lack of creativity to evoke untapped possibilities for resolving citizens’ concerns.

Therefore, it is very important to understand various challenges that inflict state institutions in India and why there is such a large gap between what the citizens aspire from these institutions and what is actually delivered at the grassroots? For this, apart from relying on anecdotal understanding, a summarized overview of literature was deemed crucial.

Review of Literature

Academic literature is replete with various systemic challenges that significantly hinder the efficiency and effectiveness of states in India such as ‘bureaucratic inefficiency’, identified by rigid hierarchical structures and red tape (Muralidharan et al., 2020)⁴, ‘corruption’ that has undermined public trust and has been diverting resources away from essential services (Malhotra, 2014⁵, Transparency International, 2020⁶) and so on. As if this was not enough, states reek with outdated ideas as bureaucratic culture is averse to riskier advents and hence end up stifling creativity to resolve state issues through active participation of employees (Banerjee & Duflo, 2019)⁷ or communities (Malhotra, 2017⁸; Singh, 2019⁹). Additionally, many states struggle with inadequate funding, which limits their ability to implement and sustain development projects (Chaudhuri, 2021)¹⁰ and ‘political interference’ that prioritises politically motivated goals over long-term strategic planning (Singh, 2019)¹¹ and motivates data manipulation to distort facts. Research study by Kingdon and Muzammil, (2009)¹² specifically provides empirical evidence to accentuate how political factors influence education outcomes and teacher performance in some of the Indian states. In fact, there are many more studies (for instance Debroy, & Bhandari, 2003¹³) that have relied on empirical evidence to incisively accentuate the significant variation in states’ performance across key development indicators viz. health, education, and infrastructure due to prevailing issues including bureaucratic bottlenecks, and political meddling contributing to poor service delivery.

Even the archaic data collection and storage technologies hinder effective data-driven policy formulation at the state level (Malhotra et. al, 2018¹⁴, Muralidharan et al., 2020)¹⁵. Inefficiencies and disparities in resource allocation too have been lamented that has considerably affected public investment in infrastructure across Indian states (Deininger & Jin, 2008)¹⁶. In yet another study by Rao (2000)¹⁷, an empirical analysis of the fiscal performance of Indian states brings forth challenges related to revenue generation, expenditure management, and fiscal discipline. Needless to say, because of all varied reasons as poor bureaucratic capacities and systems, distorted financial discipline, political interference and so on, a glaring chasm is building up between the state's actions and the citizens’ aspirations. Significant investments in various sectors of governance (education, health, finance and so on) are unfortunately not translating into impressive performance of state machinery. Therefore, weakness is not due to a lack of resources but rather the inefficient and ineffective use of those resources. There is indeed empirical evidence (for instance, Devarajan, Swaroop, & Zou, 1996)¹⁸ that despite having ample resources, the countries that are poorly governed and regularly combat with issues such as inefficient use of resources more often than not experience weak public service delivery. A similar study in the context of African states may also be referred and analogously applied in the context of Indian states (Collier, 2000)¹⁹ to provide further scholarly basis for the argument that improving governance and resource management is crucial for enhancing the effectiveness of public services.

Addressing state level ineptitudes indeed requires completely out-of-box, creative approach to resource and data management so as to boast of a responsive and agile state institutional framework, aptly understood under the umbrella concept of ‘Reimagining Institutes’.

Need for Reimagining Institutions

India needs to boost its government's ability to keep growth going and speed up its development trajectory. This calls for a fundamental rethinking of governance and administrative reform and evolve-to-respond to the changing needs of a growing nation. It has now become imperative to revisit state action and align it with the aspirations of the populace. A paradigm shift towards building responsive, capable state through reform and inventiveness can help shift from a rather bureaucratic scenario to one that is more decentralised and effective. A supportive environment for risk-taking and learning from failures needs to be curated through state level institutes. Multi-faceted approach including capacity building, policy reforms, transformational governance models, and accountability of public officials are essential to improve the functioning of institutions. Additionally, fostering a culture of inclusivity and transparency can help bridge the gap between state actions and public aspirations.

The time is now ripe to not just focus on public spending but on realigning state institutes to focus on data and evidence; to shift from the traditional bureaucratic approach to a more dynamic, performance-oriented governance model.  There is a need to enhance state capacity to celebrate data and digital more intrinsically; it requires newer strategies of public service delivery rather than pumping more resources on physical infrastructure in the state. Public Service Delivery, is the basic responsibility of any democratic, made possible through its state machinery.

Effective use and deployment of digital technologies, and co-creation of a sustainable digital architecture with citizens, will go a long way to safeguard equitable, transparent and efficient public service delivery in the state (Malhotra et al, 2020)²⁰. And when all the states shall revamp themselves in the new digital and data driven avatar, the nation state too shall bloom. After all institutions and their environments are interconnected parts of the entire big system (Bertalanffy, 1968)²¹. With the lofty aim of Viksit Bharat @2047 looming close, this clarion call to ‘break the ground’ is indeed very well-timed and totally aligned to the theory of "arrow of time’s” (Layzer, 1975)^22. The theory guards that the unrelenting forward motion of a society (or a nation) might shove it on an unpredictable and unstoppable march towards uncertainty. The weight of unresolved issues of the past always cast a long shadow over its future. Therefore, a nation or a society must keep doing course-corrections to reach its highest levels of development, else chaos might prevail.

Some of the Recommendations

   i.        Establishing State Statistics Commission (SSC): Data analytics is the way toward transparency and accountability within government (Scott & Carrington, 2019)²³. Time is indeed ripe in India to pull out a new leaf in governance whereby decision-making may be completely reliable and real-time emanating from granular data and not anecdotal reasons or biases. For doing so, State Statistics Commission (SSC) must be established at the state level to provide technical guidance as well as mechanisms to build capacity in data collection, analysis, and use in providing evidence-based governance. Some of the activities include district-level annual surveys, a high-capacity call centre, and administrative data quality improvement. The commission would also back the formulation of a dedicated data analytics unit in the planning departments to aid decision-making and strategic planning through data. This commission shall support different government departments within the state. This is expected to professionalize and depoliticize handling of data within the government and to engender a culture in which decisions are driven more by data than by opinions. It would have the commission develop a strong statistical infrastructure that others in the states would emulate and significantly turn towards more informed and effective governance at the state level.

 ii.         Establishing Human Resource Commission (HRC) : Review of Literature affirms that the strategic management of talent is essential throughout the levels of the organisation to sustain success (for instance, Lawler III , 2008)²⁴ and that coherent human resource practices should align with organizational strategy for enhanced performance and commitment (for instance, Pfeffer, 1998)²⁵. Indeed, integrated and strategic human resource management is important in enhancing organizational effectiveness. These principles also uphold the need for institutionalising a sturdy Human Resource Commission (HRC). Taking cue from these theoretical frameworks, HRC would help state institutions to enhance the capacities of its human resources and further rationalize strategic management of human resources across government functions. This particularly includes the need for conducting recursive capacity building endeavours as well as recruitment of skilled personnel. Potential leaders within the state bureaucracy must be inducted or timely identified and then nurtured be recursively undertaken through specialized leadership development programs. All such inputs would be streamlined through the proposed State Public Human Resources Commission (HRC). “Accelerating India's Development" makes a case for a State Public Human Resources Commission to come to grips with the current fragmented and inefficient system of public sector personnel management in India. The proposed HRC would merge the roles being played at present by various institutions for more coherence toward human resources, including the adoption of integrated systems for managing personnel data, competence mapping, and the development of competency-based career progression. HRC would particularly ensure oversight of key issues of recruitment, training, promotion, and performance management. It would also subsume the functions of pay commissions in relating compensation more directly with performance outcomes. In addition, the commission would handle public personnel disputes through an administrative tribunal that might ease litigation by reducing court backlogs. Indeed, there is a general consensus in practice as well as in the related literature, on the imperatives of strategic, integrated HR management for organizational efficiency and effectiveness, including in government.

iii.         Establishing State Public Finance Commission (PFC): The concept of a State Public Finance Commission (PFC) is an important initiative in terms of ensuring better governance over public finances, looking beyond mere quantification to the quality of revenue and expenditure. This assumes significance because most state financial institutions suffer from the inadequacy of a single strategic umbrella and are usually episodic, hence inefficient in public expenditure and the quality of revenue collection. The PFC would oversee a more analytical and evidence-based approach to public spending, enhancing cost-effectiveness and scrutinizing procurement to ensure value for money. As with the Congressional Budget Office in the USA, the PFC would have the capacity to generate independent analysis of major financial proposals, therefore giving a more stable and accountable financial governance structure. This suggestion of establishing PFC borrows elements from various scholars (including Allen & Tommasi, 2001²⁶; Lienert, 2003²⁷) who hold the view that an integrated financial management system is crucial for enhancing fiscal responsibility and effectiveness in governance and that establishment of coherent institutions of fiscal for sustainable financial behaviour is a prerequisite for its success.

iv.        Ensuring Co-Creation of the State Policy Making: Random-sample deliberation, as articulated by literature (such as Landemore , 2020²⁸; Guerrero, 2014)²⁹ , involves creating deliberative bodies of citizens selected randomly from the voter registry to engage with governance processes such as budget allocations and policy formulations. This procedure tries to reduce money's action in politics, to ensure fair representation without quotas, and increase civic engagement.  Several scholars (such as Landemore, 2020³⁰; Malhotra, Anand & Soni, 2020³¹) remind that the concept of open democracy as a form of governance becomes more participatory if it includes more and more societal interests and perspectives.  Guerrero (2014)³² advocates for the same route, arguing random selection of decision-makers can help overcome biases and limitations inherent in electoral processes dominated by money and political influence. “Citizen assemblies" with randomly selected members, proposed by "Accelerating India's Development," are expected to redress various systemic deficits in the process of Indian democracy, such as the surging role of money in politics, underrepresentation of the marginalized, and low citizen engagement. This could become a very radical, innovative, and even transformative model of governance that is both more inclusive and representative by fundamentally rethinking the role of ordinary citizens in political decision-making.

 v.       Creating a State Level Data Exchange DPI: Last but not the least the potential for data-driven growth is immense. However, this potential remains largely untapped due to fragmented data ecosystems related to several sectors, which are further lying scattered across various states. The present databases pertain to mostly one single activity or a group of activities but not for the entire district for all the governance sectors in the state. Therefore, there is a need for building a unified Data Exchange DPI in Governance at the state level. This Digital Public Infrastructure (DPI) could be understood as a network of interconnected digital systems, tools, processes to provide essential services to the entire populace in the country. In India, noteworthy example of DPI Unified Payments Interface (UPI) for seamless digital transactions, that has been celebrated across the globe as a digital tool for ushering in economic growth and financial inclusion for one and all, despite the diversity and expanse of the country. Coupled up with Aadhar as a DPI for digital identification and ‘Digi locker’ as a private space in public cloud, Indian citizens have been empowered to securely access public services in ‘faceless’, ‘paperless’ and ‘cashless’ mode (Malhotra, 2016)³³. India has already built a state-of-art digital infrastructure as ‘India stack’ and there could not have been a better time than this to leverage it to build a data exchange DPI - one for each state. A unified , state level data exchange for all the districts in each of twenty- eight (28) states and eight (8) Union territories of the country would help  to centralize governance data related to key sectors, such as Agriculture & Allied Sector, Commerce & Industry, Human Resource Development, Public Health and so on. Appropriate creation and use of such a DPI will help to curate a robust framework for monitoring progress and identifying governance gaps in various sectors at the district level for the identified indicators. This would also help to empowering local bodies to espouse evidence based decision making that could in return strengthen decentralisation of decision-making in the country.

Conclusion

Effective institutions are crucial for aligning interests with broader societal goals and ensuring that good ideas are implemented effectively. India’s developmental trajectory is at a crucial point where the key to unlocking its vast potential is revamping the state institutions. Essentially, there is a need to inculcate a systemic approach toward institutions so that development takes the right path: to be more effective, more equitable, and more sustainable. Therefore, aligned with India’s Vision Viksit Bharat@2047, the proposed set of recommendations in this chapter that encompass the idea of co-creating state policy framework, establishing three core commissions for statistics, human resources and finance and designing a state level data exchange DPI - all blend together to strengthen the state institutes for efficient deliverance of public goods and services to its citizens. On balance, even the best policies and ideas will fail to realize their potential if robust institutes are not conceptualised and implemented. This study, therefore, may be deemed as a call to action for policymakers, scholars, and citizens to engage in the urgent task of building a more robust state apparatus. The need to strengthen the institutes as the core building blocks of state capacity is not just as an administrative necessity but is now a moral obligation to ensure equity, justice, and prosperity for all Indians in Viksit Bharat@2047. Such a radical transformative approach of ‘reimagining institutes’ would not just elevate the nation to a developed status by the year 2047, but would also potentially serve as a transformative model for other developing countries too.

Endnotes

1.       State Public Service Commission, State Election Commission, State Information Commission, State Finance Commission, State Human Rights Commission, State Education Board, and State Medical Council.

2.       Chakrabarti, R., & Sanyal, K. (2015). Public Service Delivery in India: Challenges and Way Forward. Economic and Political Weekly, 50(9), 44-52.

3.       Muralidharan, K. (2024). Accelerating India's Development. Penguin Publishers

4.       Muralidharan, K., Niehaus, P., & Sukhtankar, S. (2020). Accelerating India's Development: Challenges and Policy Solutions. Journal of Economic Perspectives, 34(1), 29-52. Malhotra, C. (2014). "Role of Social Media in Promoting Transparency in an Open Government Era in SAARC Countries with Special Reference to India In W. Gilles, I. Bouhadana (eds.) Gouvernances publiques, 2014. Paris: IMODEV.

5.       Transparency International. (2020). Corruption Perceptions Index 2020. Transparency International.

6.       Banerjee, A., & Duflo, E. (2019). Good Economics for Hard Times: Better Answers to Our Biggest Problems. PublicAffairs.

7.       Charru Malhotra (2017). Co-Creating Good Governance using Emerging Technologies. ELETS e-Gov. URL- http://egov.eletsonline.com/2017/08/co-creating-governance-using-emerging-technologies/

8.       Singh, N. (2019). Governance in India: A Policy Perspective. Oxford University Press.

9.       Chaudhuri, S. (2021). Public Finance and Public Policy in the New Century. Sage Publications India.

10.    Ibid 6.

11.    Kingdon, G. G., & Muzammil, M. (2009). The Political Economy of Education in India: Teacher Politics in the States. Oxford Review of Education, 35(1), 39-58.

12.    Debroy, B., & Bhandari, L. (2003). State Performance and Capacities in India. New Delhi: Academic Foundation.

13.    Charru Malhotra, Rashmi Anand and Shauryavir Singh (2018). Applying Big Data Analytics in Governance to Achieve Sustainable Development Goals – SDGs. In U.M Munshi.& N. Verma (Eds), India In Data Science Landscape Towards Research Standards and Protocols Singapore, SG: Springer International Publishing AG. URL: https://link.springer.com/chapter/10.1007/978-981-10-7515-5_19

14.    Ibid 2.

15.    Deininger, K., & Jin, S. (2008). Determinants of State-Level Public Investment in Rural Roads in India. Journal of Development Studies, 44(6), 802-821.

16.    Rao, M. G. (2000). Public Finance in India: Issues and Concerns. Economic and Political Weekly, 35(8/9), 553-566.

17.    Devarajan, S., Swaroop, V., & Zou, H. (1996). Does Governance Matter? Yes, No or Maybe: Some Evidence from Developing Countries. World Bank Economic Review, 10(2), 219-243.

18.    Collier, P. (2000). The Quality of Governance: "Second-Generation" Civil Service Reform in Africa. Journal of African Economies, 9(1), 132-156.

19.    Charru Malhotra, Anand. R. & Vivek Soni (2020). Creating Public Services 4.0 - Sustainable Digital Architecture for Public Services in India. Indian Journal of Public Administration (IIPA, October 2020).

20.    Von Bertalanffy, L. (1968). General System Theory: Foundations, Development, Applications. George Braziller.

21.    Layzer, D. (1975). The arrow of time. Scientific American, 233(6), 56-69.

22.    Scott, J., & Carrington, P. (2019). Data analytics for better governance. Oxford University Press.

23.    Lawler III, E. E. (2008). Talent: Making People Your Competitive Advantage. Jossey-Bass.

24.    Pfeffer, J. (1998). The Human Equation: Building Profits by Putting People First. Harvard Business School Press.

25.    Allen, R., & Tommasi, D. (Eds.). (2001). Managing public expenditure: A reference book for transition countries. OECD Publishing.

26.    Lienert, I. (2003). A comparison between two public expenditure management systems in Africa. International Monetary Fund.

27.    Landemore, H. (2020). Open Democracy: Reinventing Popular Rule for the Twenty-First Century. Princeton University Press.

28.    Guerrero, A. (2014). Against elections: The lottocratic alternative. Philosophy & Public Affairs, 42(2), 135-178. DOI: 10.1111/papa.12044.

29.    Ibid 27

30.    Ibid 20.

31.    Ibid 28.

32.    Charru Malhotra et al.(2016). ICT4D: Innovating Governance to be more Citizen-Centric using ICT. Management in Government: Journal of Administrative Reforms, XLVI(1), DARP&G, Government of India, New Delhi (pp. 1-14. 10) ISSN: 0047-570X