BackThe NDA’s focus is on operational effectiveness, not strategy
The NDA's belief is that getting govt machinery working, and focusing on efficiencies, will help revive economic growth
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Remember the big management debate of the 1990s set off by an article in the Harvard Business Review on how Operational Effectiveness, or OE, was not strategy, and how some companies made the mistake of thinking it was?
This writer was reminded of that recently during a meeting with a senior official of the Bharatiya Janata Party-led National Democratic Alliance (NDA) government. I asked him what his government’s biggest challenge was. “For nearly three years, the government had ceased to perform. Our biggest task is to restore government."
Put simply, that means the NDA wants to get the government to work.
This is smart, especially given the legislative math of the Rajya Sabha where the NDA is a significant minority. It is also a recognition by the NDA that it can show the quickest results by getting the system working again. The NDA’s belief is that getting government machinery working, and focusing on efficiencies, will help revive economic growth.
Speaking on the sidelines of a book launch in Delhi, finance minister Arun Jaitley said as much. “Even at the modest level of governance (provided by the Congress-led United Progressive Alliance), we have grown at 8-9%. With much better level of governance, I think we have capacity to achieve a much higher growth rate."
This emphasis on OE doesn’t mean the NDA doesn’t have a strategic vision. It does, as, indeed, its predecessor, the UPA did. But I’d rather not dwell on the strategies—at least, not yet—because it is execution that has been India’s failing.
India finds itself languishing, largely on account of its investment cycle not reviving. If the NDA sticks to script and focuses on OE, then it will improve the efficiency of government machinery and its effectiveness over the next two or three years. By then, if all else goes well, and the government avoids any mis-steps, the investment cycle should have revived. With higher effectiveness and efficiency, these investments should consequently get more bang for the buck.
I will not take issue with pundits who bemoan the lack of Big Bang reforms by the new (it still is) government. Only, I believe there is a time for reforms, and a time for making sure the system works well, and this is time for the latter.
The UPA, as we all know, especially in its second term, was distracted to the point of inaction by a raft of scandals associated with high office. Policy paralysis was a key factor that triggered the rapid deceleration in growth—from 9% plus to less than 5%.
There were structural and global economic reasons for this decline, but, almost intuitively, one knows that we messed up.
Take the ubiquitous ATM. Many will recall the adventure associated previously with the task of drawing money from a bank. First one had to queue up with the cheque at one counter, then watch while the ledger with the cheque enclosed did it rounds with various managers for their approvals, before ending up with the teller—if you were lucky this ordeal would be over in about 30 minutes.
Now this entire process has been cut short to something less than a minute. You walk up to an ATM, insert your debit card, punch in the sum you want to withdraw and take the money. And subject to some new restrictions that the Reserve Bank of India has put in place, you can pick up your money at any ATM and not just from one run by your bank. This aside demonstrates the power of disintermediation, as also the efficiencies that come with automation and digitization.
What we have seen in the first three months of the new government is this great desire to push for an efficient delivery network. Jaitley’s remarks this week confirm this. To its credit, this task was first initiated by the Narendra Modi-led government at the level of the Union cabinet. Among its first announcements was one about the disbanding of the countless group of ministers (GoMs) created by the UPA. Guidelines were issued on streamlining the preparation of cabinet notes—restricting interventions to only two officials—instead of the existing practice of it going through the entire bureaucracy of a ministry, beginning from the bottom.
Similarly, the NDA announced a single-window clearance system for capital-intensive steel, coal and power projects to speed up approvals for investments. The new facility will facilitate speedy resolution of issues related to contentious environmental and forest clearances that have held up numerous projects across the country. As the government official mentioned in the first instance revealed, some projects took 300 days to get routine environmental clearances under the previous regime.
The message is clear: this government is betting that improving efficiencies will give growth a boost. Anecdotally, one hears stories about how the bureaucracy is rapidly recalibrating to the altered circumstances. It may well be that this is also a reflection of the relief felt by the bureaucracy that the recent regime change, unlike those that came before it, has not been accompanied by any major shuffle in the civil service.
All that said, like the controversial Harvard Business Review article noted, OE is not a strategy. Once it has done enough on the effectiveness and efficiency fronts, the NDA would do well to unveil those radical reforms it often spoke of in the run-up to the election.
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