Sanjeev Sanyal Speaks About The Importance of Process Reforms At India Economic Summit

Today, Sanjeev Sanyal, member of Prime Minister's Economic Advisory Council, attended Republic TV's India Economic Summit . Focus of his talk was government efficiency and process reforms. 

He began by quipping that these days, a lot of people are hearing about government efficiency, due to Elon Musk. 

Musk has proposed creating a Department of Government Efficiency in US. DOGE, if you will, which, coincidentally, used to be the title of the head of the Venetian oligarchy. Musk, like many in Silicon Valley, has been influenced by James Burnham's seminal book - ‘The Managerial Revolution’.  

Sanyal stated that the current Indian government, has been working on government efficiency for quite some time. 

Why do we need process reforms?

To highlight the importance of process reforms and government efficiency, he gave the example of protected monuments. He revealed that India has hundreds of protected monuments. Not all of these are ancient temples, forts or Taj Mahal. He spoke about a protected monument near Kashmere Gate in Delhi. This monument, was dedicated to a British colonial officer. Apparently, a rather brutal fellow (unsurprising). However, his moral character isn't really the point. 

The Imperial regime built a monument dedicated to him and they included it in the list of protected monuments. However, after India attained independence, this monument remained on the list. Some decades later, this colonial officer's homeland, which is Ireland, said that they want the statue dedicated to him. The statue was sent to Ireland. Astonishingly, even after the monument was shipped to Ireland, the area where this chap's statue stood, remained in the list of protected monuments. Needless to say, this is quite absurd. 

The scourge of government inefficiency 

Sanyal's point? The body responsible for maintaining the list of protected monuments, was so inefficient, that they didn't even bother updating the list. Sanyal suggested that there are numerous such government agencies, regulations, which almost like a cobweb, block the nation's path of prosperity. 

To the surprise of many in the audience, Sanyal revealed that until the pandemic, working from home was illegal in India! Crux of Sanyal's talk was that government inefficiency makes it harder for people to start a new business, makes people risk-averse. Sanyal suggested that a lot of the regulations, well-indented though they may be, over time, become barriers. 

All governments in the world, all large organizations as well, are bound to, overtime, develop sclerosis. Sanyal stated that process reforms are extremely important, even though they are underrated, because these are the reforms that fix the nuts and bolts of the system. 

How process reforms are moving the needle

He spoke about the time it takes to close a business in India. To close down a business, one would have to jump through numerous hoops in India, coax a number of government officials. To close down a business! Imagine, the grind one has to go through to start a business. The good news? Due to certain process reforms, the time is takes to close down a business in India has gone down considerably. Sanyal, in his talk, revealed that these days, one can close down a business more quickly in India, than they can in Singapore. 

Sanyal, concluded his talk, by saying that numerous such process reforms are underway. He quipped that they usually don't make it to the headlines, there is no debate about them in news studios, but these reforms are burning away the cobweb of pointless regulations, so to say, in numerous sectors. The end result? India transforming into a dynamic society, where, let's say someone who wants to raise money to start a deep tech company, can do so without being harassed by agencies. 

These process reforms, needless to say, are necessary. Bureaucratic agencies, often develop a life of their own. Moreover, the incentive structure within bureaucracies in general are such that they are quite risk averse. The result? Most bureaucratic agencies don't work on solving key problems, as one has to take some amount of risk to solve a problem. Instead, a lot of bureaucratic agencies just work to increase their own power. Regular mowing of the lawn is perhaps necessary to ensure a nation's flourishing.