Towards an Economical Administration in India

By Prof. M. Ruthnaswamy

Summary

Prof. M. Ruthnaswamy’s Forum of Free Enterprise booklet, based on a lecture delivered in Bombay on 22 August 1958, is a sustained critique of the cost and bloat of Indian public administration. He argues that because the money government spends is the money of a very poor people, the State has a special obligation to spend economically, yet post-independence governments have instead spent ‘in the spirit of the new poor trying to ape the manners of the new rich’ — symbolised by extravagant new secretariat buildings rising in almost every state capital. Surveying the machinery of government, he contends there are too many ministries and departments (a now-needless Law Ministry, a long-lived Rehabilitation and Refugee Ministry, a Community Development Ministry intruding on a State subject), excessive establishment costs, and a tax-collection apparatus that consumes an unusually high share of revenue.

Key points

• Because government spends the money of a very poor people, economical administration is a moral as well as a fiscal duty.

• Post-independence governments spend like ‘the new poor’ aping the new rich, exemplified by extravagant new state secretariat buildings.

• India’s government has too many ministries and departments; several (Law, Rehabilitation/Refugee, Community Development) are unnecessary or duplicative.

• General-administration and tax-collection costs are disproportionately high — about 10% spent on collecting taxes, a share not seen in advanced countries.

• Invokes the 18th-century parliamentary resolution that ‘the influence of the Crown has grown… ought to be diminished’, reapplied to government expenditure.

• Calls for an efficiency audit (citing Japan’s Auditor-General with expert teams) and proper priorities in planning — village roads and rural housing before great highways and steel works.

• Distinguishes a government ‘of the people, by the people’ from one genuinely ‘for the people’, which requires spending on service and redress of poverty.

• Frames thrift as saving people, not merely money: ‘I want saving not because I want to save money but because I want to save people.’

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