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13 THirTEEnTH REPORT Or SECOND ADMINISTraTIVE REFORMS COMMissiON G A N isa T I ON al ST R U C TU R E OF G OVE ORGANisaTIONal STRUCTURE OF R GOVERNMENT OF INDia NMENT OF IND ia Second Administrative Reforms Commission Government of India 2nd Floor, Vigyan Bhawan Annexe, Maulana Azad Road, New Delhi 110 011 e-mail : [email protected] website : http://arc.gov.in APRIL 2009 GOVERNMENT OF INDIA SECOND ADMINISTRATIVE REFORMS COMMISSION THIRTEENTH REPORT OrganiSationaL StrUCTUre OF Government OF India APRIL 2009 Government of India Ministry of Personnel, Public Grievances & Pensions Department of Administrative Reforms and Public Grievances Resolution New Delhi, the 31st August, 2005 No. K-11022/9/2004-RC. — The President is pleased to set up a Commission of Inquiry to be called the Second Administrative Reforms Commission (ARC) to prepare a detailed blueprint for revamping the public administration system. 2. The Commission will consist of the following : (i) Shri Veerappa Moily - Chairperson (ii) Shri V. Ramachandran - Member (iii) Dr. A.P. Mukherjee - Member (iv) Dr. A.H. Kalro - Member (v) Dr. Jayaprakash Narayan - Member* (vi) Smt. Vineeta Rai - Member-Secretary 3. TheC ommission will suggest measures to achieve a proactive, responsive, accountable, sustainable and efficient administration for the country at all levels of the government. The Commission will, inter alia, consider the following : (i) Organisational structure of the Government of India (ii) Ethics in governance (iii) Refurbishing of Personnel Administration (iv) Strengthening of Financial Management Systems (v) Steps to ensure effective administration at the State level (vi) Steps to ensure effective District Administration (vii) Local Self-Government/Panchayati Raj Institutions (viii) Social Capital, Trust and Participative public service delivery (ix) Citizen-centric administration (x) Promoting e-governance (xi) Issues of Federal Polity (xii) Crisis Management (xiii) Public Order Some of the issues to be examined under each head are given in the Terms of Reference attached i as a Schedule to this Resolution. Organisation 4. TheC ommission may exclude from its purview the detailed examination of administration of Defence, Railways, External Affairs, Security and Intelligence, as also subjects such as Second Administrative Reforms Commission Centre-State relations, judicial reforms etc. which are already being examined by other bodies. The Commission will, however, be free to take the problems of these sectors into account in 1. Dr. M.Veerappa Moily, Chairman* recommending re-organisation of the machinery of the Government or of any of its service 2. Shri V. Ramachandran, Member** agencies. 3. Dr. A.P. Mukherjee, Member 4. Dr. A.H. Kalro, Member 5. The Commission will give due consideration to the need for consultation with the State 5. Dr. Jayaprakash Narayan, Member*** Governments. 6. Smt. Vineeta Rai, Member-Secretary 6. The Commission will devise its own procedures (including for consultations with the State Government as may be considered appropriate by the Commission), and may appoint Officers of the Commission committees, consultants/advisers to assist it. The Commission may take into account the existing material and reports available on the subject and consider building upon the same 1. Shri A.B. Prasad, Additional Secretary rather than attempting to address all the issues ab initio. 2. Shri P.S. Kharola, Joint Secretary# 3. Shri R.K. Singh, PS to Chairman# 7. The Ministries and Departments of the Government of India will furnish such information 4. Shri Sanjeev Kumar, Director and documents and provide other assistance as may be required by the Commission. The 5. Shri Shahi Sanjay Kumar, Deputy Secretary Government of India trusts that the State Governments and all others concerned will extend their fullest cooperation and assistance to the Commission. *Dr. M. Veerappa Moily – Chairman, resigned with effect from 1st April, 2009 (Resolution No.K-11022/26/2007-AR, dated 1st April, 2009) 8. TheC ommission will furnish its report(s) to the Ministry of Personnel, Public Grievances **Shri V. Ramachandran, was appointed Acting Chairman vide Resolution & Pensions, Government of India, within one year of its constitution. No. K-11022/26/2007-AR, dated 27th April, 2009 ***Dr. Jayaprakash Narayan – Member, resigned with effect from 1st September, 2007 (Resolution No.K- 11022/26/2007-AR, dated 17th August, 2007) Sd/- (P.I. Suvrathan) # Till 31.03.2009 Additional Secretary to Government of India *Dr. Jayaprakash Narayan – Member, resigned with effect from 1st September, 2007 (Resolution No. K.11022/26/207-AR, dated 17th August, 2007). ii iii CONTENTS Chapter 5. The Structure of Government of India at the Apex 74 Chapter 1. Introduction 1 5.1 Rationalising the Functions of Government 74 Chapter 2. Reorganising Government - International Experiences 4 5.2 Rationalising the Size of Government 78 2.1 Background 4 5.3 Reorganising the Ministries and Departments 79 2.2 Models of Structural Reforms in Government 6 5.4 Recasting the Allocation of Business Rules 97 2.3 Origins of NPM 8 5.5 Ministries and Departments to Primarily Focus on 103 Policy Analysis 2.4 Reforms in Public Administation in UK 15 5.6 Creation of Effective Executive Agencies 109 2.5 Reforms in Australia 18 5.7 Internal Reorganisation of Ministries 119 2.6 Reforms in Thailand 20 5.8 Simplification of Governmental Processes 125 2.7 Link between Governance and Growth 23 5.9 Recasting the Manual of Office Procedure 130 2.8 World Bank’s Recommendations for Improving 32 Governance Capacity 5.10 Coordination Mechanisms 134 2.9 Lessons from Some Commonwealth Countries 35 5.11 Reducing Paperwork in Government Offices 138 2.10 Global Lessons 38 Chapter 6. Creating an Effective Regulatory Framework 141 Chapter 3. Existing Structure of Government of India 46 6.1 Introduction 141 3.1 Historical Background 46 6.2 Regulatory Functions 141 3.2 The Constitutional Provisions 47 6.3 The Statutoty Independent Regulatory Agencies 144 3.3 The Structure of a Department 49 6.4 Issues 149 3.4 Reforms since Independance 52 Conclusion 159 3.5 Strengths and Weaknesses of the Existing Structure 68 Summary of Recommendations 160 Chapter 4. Core Principles of Reforming the Structure of Government 71 iv v LIST OF TABLES CEO Chief Executive Officer CERC Central Electricity Regulatory Commission Table No. Title COS Committee of Secretaries Table No. 5.1 List of Ministerial Responsibilities in the United Kingdom 79 DGET Directorate General of Employment and Training Table No. 5.2 List of Departments in the US and Their Responsibilities 86 DOD Department of Defence (US) DOE Department of Energy (US) Table No. 5.3 List of Existing Ministries / Departments 89 DOH Department of Health (US) Table No.5.4 Departmentally Related Standing Committees of Parliament 94 DOI Department of Interior (US) DOJ Department of Justice (US) Table No. 6.1 Comparison of Functions and Powers of Different 145 DOP&T Department of Personnel and Training Regulatory Bodies DOT Department of Telecommunications LIST OF FIGURES DSOs Departmental Strategic Objectives Figure No. Title ERCs Electricity Regulatory Commissions EU European Union Fig 5.1 Government and Executive Agencies GDP Gross Domestic Product LIST OF BOXES GOMs Group of Ministers IAIs Independent Administration Institutes Box No. Title IIPA Indian Institute of Public Administration Box No. 2.1 India’s Ranking on Key Parameters 4 IMD International Institute for Management Development, Switzerland Box No. 2.2 Delivering High Quality Public Service: The Singapore Way 35 INTAN Institute Tadbiran Awam Negara (Malaysia) IPC Indian Penal Code Box No. 5.1 Policy Making to Policy Planning 105 IRDA Insurance Regulatory and Development Authority Box No. 5.2 Inland Revenues, Britain 110 LDC Lower Division Clerk MOU Memorandum of Understanding Box No. 6.1 What Does a Management Statement Set Out? 152 MRTPS Monopolies and Restrictive Trade Practices Commission LIST OF ABBREVIATIONS NATO North Atlantic Treaty Organization NPM New Public Management Abbreviation Full Form NPR National Performance Review APOs Autonomous Public Bodies O&M Organisation and Management ARC Administrative Reforms Commission PMS Performance Management System ASEAN Association of South-East Asian Nations vi vii PSA Public Service Agreement PSUs Public Sector Undertakings PUC Paper under Consideration SEBI Securities and Exchange Board of India Introduction 1 SES Senior Executive Service TQM Total Quality Management TRAI Telecom Regulatory Authority of India 1.1 One of the terms of reference of the Administrative Reforms Commission pertains to the structure of the Government of India. The Commission has been asked to look into the UAE United Arab Emirates following aspects: UDC Upper Division Clerk UK United Kingdom 1. Organizational Structure of the Government of India UN United Nations 1.1 Reorganization of Ministries and Departments UPSC Union Public Service Commission 1.1.1 Revisiting and redefining the role of the Ministries and US United States Departments in the context of evolving role of governance and need for greater collaboration. 1.2 Manpower planning and Process re-engineering. 1.3 Suggest ways to position the administrative services in the modern context of global integration, emergence of markets and liberalisation. 1.4 To examine if the present system of governance is optimally suited to the environment of the times 1.4.1 To suggest a framework for possible areas where there is need for governmental regulation (regulators)
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