Daily Financial News Analysis – 14th Mar’20

Table of Contents

Too many ministries

The precise translation of broad policies into concrete laws, rules and regulations, and the effective delivery of programmes and projects depends on the implementation process.
Implementation is integral to nearly everything that the government does.
Delivery of every service by central and state governments, whether it is related to health, education, infrastructure, international trade, tax collection, defence, rule of law or dispensation of justice, depends on the process of implementation and quality of personnel along the chain of delivery.
The central government in India has far too many ministries.
In early 2018, India had a total of 53 ministries
Out of 19 major countries, only Sri Lanka, with 51 ministries, came close to India.
At 13, Germany had the smallest number of ministries followed by France, which had 16.
Large number of ministries is detrimental to governance

too many ministries end up having jurisdiction over any given decision that the government must take.

The government gets centrally involved in sectors that should be off limits to it.

India has ministries for steel, textiles, electronics, information technology, food processing, heavy industries, mines, chemicals and fertilisers.
These ministries perpetuate and expand the scope of public sector enterprises in these sectors.
They also become focal points for lobbying by narrowly defined special interests.
The railway ministry is a buyer of steel and the steel ministry is a seller.
Because both activities are a part of the government, it is expected that the railway ministry would buy steel from the steel ministry, even if it is a costly supplier.
When public sector steel companies perform poorly, the ministry also manages to convince the government to impose all kinds of duties on imported steel.
There is a need to phase out many of the ministries and amalgamate others to create more encompassing ones.
A single transport ministry could replace the ministries of roads, shipping, civil aviation and railways.
An energy ministry could be created by merging coal, power, petroleum and gas, and new and renewable energy.