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Published: Nov. 14, 2021, 4:19 a.m.

Not(PolicyWTF): Reforming Procurement (Sanjeev Kumar Must Be Smiling) \xa0

Pleasant surprises in policymaking in India

\u2014 RSJ

Since we take great pleasure in highlighting policy screw-ups around here, it is only fair we appreciate measures that aren\u2019t PolicyWTFs when they make an occasional appearance on our landscape like rare migratory birds. Last week we had one such sighting. (Deep breath). The Procurement Policy Division (PPD) in the Department of Expenditure (DoE) under the Ministry of Finance (MoF), Government of India (GoI) released the \u2018General Instructions on Procurement and Project Management\u2019. The press release reads:

\u201cThese guidelines attempt to incorporate into the realm of Public Procurement in India, innovative rules for faster, efficient and transparent execution of projects and to empower executing agencies to take quicker and more efficient decisions in public interest. Some of the improvements include prescribing strict timelines for payments when due. Timely release of ad hoc payments (70% or more of bills raised) is expected to improve liquidity with the contractors especially Micro, Small and Medium Enterprises (MSMEs).\u201d

Importantly, it has this line too:

\u201cAlternative methods for selection of contractors have been permitted, which can improve speed and efficiency in execution of projects. In appropriate cases, quality parameters can be given weightage during evaluation of the proposal in a transparent and fair manner, through a Quality cum Cost Based Selection (QCBS), as an alternative to the traditional L1 system.\u201d\xa0\xa0

This is critical. In \u2018appropriate cases\u2019, from now on, quality of service will also be given weightage during evaluation of projects. It sounds absurd but it\u2019s true. Quality wasn\u2019t an explicit parameter for choosing suppliers in government contracts so far. So, yes, this is a reform. Bravo!

Puraane Paap\xa0

I have written about the tyranny of the L1 system and its pernicious effects before. From our edition #22 (Trishul: Ek \u2018Tender\u2019 Prem Katha):

\u201cThe procurement of goods and services by the Government of India is still largely governed by the Contract Act 1872 and Sale of Goods Act, 1930 and General Financial Rules (GFR) that are amended periodically. The most prevalent mechanism of awarding a contract in government departments and PSUs over the last century has been the L1 system, also called the Least Cost Selection Method. There is a bit of history to this. The colonial government wasn\u2019t too keen on spending a lot on projects in India. A minimal threshold of quality was all that was needed at the lowest cost. Though alternatives like the Quality and Cost Based System (QCBS) and Quality Based System (QBS) are being gradually adopted, the L1 system still holds sway after seven decades. Yes, we love our colonial past a lot that way. So, you could lie your way through the technical bid claiming excellent capabilities. Once you crossed that threshold, all you needed was some friendly insider who helped you price your bid lower than your rivals only marginally. Voila, you\u2019re in business.

Three problems arose out of this. First, since technical bids didn\u2019t have a weightage, the projects were often won by less competent firms who ended up either not completing the project or did a shoddy job. Examples of this are visible all around us in government infrastructure projects. Second, it encouraged rent-seeking behaviour among public servants who had the information about rival bids. In that cult classic, Jaane Bhi Do Yaaro, municipal commissioner D\u2019mello was playing two builders (Ahuja and Tarneja) to maximise his benefits till one of them bumps him off. Third, it led to crowding out of honest, competent players from the government tender market because they wouldn\u2019t play ball.\u201d\xa0\xa0\xa0

What\u2019s Changed?

Anyway, I went through this 22-page document released by the department and a few things stand out.\xa0

First, there are concrete measures identified to make it easy for suppliers dealing with the government. The guidelines suggest 75 per cent of payment due must be paid within 10 working days of the submission of the bill and the remaining within 28 working days. Beyond this, penal interest would apply. There\u2019s also guidance on how government entities should operate when they get into legal disputes with their suppliers. The entities should not appeal against judgments of lower courts in routine matters and decision to appeal should be reviewed by a special committee that should consider both legal merits and the practical chances of success after doing a cost-benefit analysis. This will encourage those suppliers who have stayed away from government contracts because of the jhanjhat they entail.\xa0\xa0\xa0

Second, a few other common bugbears of the government procurement process have been eliminated. For instance, the single bidder scenario in an open tender. Earlier the tender would be scrapped and a new one floated if there was only one bidder. This is no longer a necessary requirement and if the single bidder checks all the boxes, the process can continue with them to its conclusion. Also, the government entities can now quote a fixed budget for a project in the tender itself for the bidders to apply. This will take away the guesswork and protracted negotiations to get a bid under a budget that the government has in mind for specific time-bound projects.\xa0

Finally, we have the Quality-cum-Cost Based Selection (QCBS) now allowed for procurement of works and non-consultancy service where the procurement has been declared Quality Oriented Procurement (QOP) by the competent authority and where the estimated value of the tender does not exceed Rs.10 crore. Even here, the weightage of non-financial parameters cannot exceed 30 per cent. This isn\u2019t wholesale dumping of the L1 procurement system as it is made out to be but it is a continuation of the changes in the procurement process that started in 2017. And I hope as the confidence in this grows, we will phase out the L1 system completely and have a procurement framework that\u2019s modern, not a colonial relic.

p.s: There\u2019s always a lot of life lessons to learn from any government gazette and this time I learnt the difference between \u2018may\u2019, \u2018should\u2019, \u2018shall\u2019 and \u2018allowed\u2019. I have reproduced it below for your enlightenment:

\u201c(i) Instructions containing \u2018may\u2019 are to be considered desirable or good practices which procuring entities/ project executing agencies are encouraged to implement but not mandatory.

\xa0(ii) Instructions containing \u2018should\u2019 are required to be followed in general. However, there may be circumstances where it may not be practical/ desirable to implement them. In such cases, the concerned officer / agency may deviate by recording reasons in writing for not implementing the same

(iii) Instructions containing \u2018shall\u2019 are mandatory; any deviation shall require (our take: note the meta level usage of shall here) relaxation of rules from the DoE\xa0

(iv) Instructions containing \u2018allowed\u2019 indicate an optional course of action to be decided upon on merits\u201d\xa0

Aur kahan milega itna content!

A Framework a Week: What\u2019s a Policy Success?

Tools for thinking public policy

\u2014 Pranay Kotasthane

Whatay coincidence! I also have something not-so-terrible to discuss. Rarer than sighting rare migratory birds. Anyways, it\u2019s always fun to identify a policyWTF. The gotcha feeling is unmistakable. Policy watchers like us experience immense satisfaction in identifying governments\u2019 stupidities. Moreover, limited state capacity in India means that policyWTFs surface at a daily cadence. Ideas that seemed great on paper regularly morph into egregious policies.

As important as exposing government incompetence is in a democracy, we also realise the limits of analyses focusing on policy failures alone. The dominance of the language of incompetence and disillusionment with the State can lead to self-fulfilling prophecies. Fed only on a diet of policy failures, those of us who can afford, give up entirely on the State. Those who can\u2019t afford, resign themselves to a State that can give occasional handouts and provide short-term benefits.

To escape this narrative of cynicism and despair, we need to systematically understand policy successes in India. The caricature that India progresses despite its governments, not because of it, surely can\u2019t be true. There are plenty of examples where government policies effectively resolved the biggest challenges of the day. The Green Revolution, the 1991 reforms, the National Pension System (NPS) reform, Fiscal Budget Responsibility and Budget Management Act, and the Target Olympic Podium Scheme (TOPS) are just some candidates for successful policy measures that come to mind.

But identifying isolated successes doesn\u2019t go far enough. We need frameworks that can help understand what a policy success really entails. We need to understand the elements that are more likely to make policies successful in the Indian context. A search on these lines led me to this book Successful Public Policy: Lessons from Australia and New Zealand, which has a good review of literature on this topic. Let\u2019s discuss a few of them.

Framework 1: Programmatic-Political Axes

The first framework assesses success on two parameters - programmatic efficiency and effectiveness on one hand, and political coalition building and communication on the other. My illustration of this framework is below.

This framework helps explain why the farm laws cannot be classified as a policy success or why this government doesn\u2019t project demonetisation as a terrific policy reform anymore.

Stories, Stories, Stories

The crucial point is that calling a policy successful is at its core an intensely political claim. Apart from good \u201ccraft work\u201d, it involves shaping the narrative so that it is widely seen as a success. As the authors write:

\u201cPolicy successes, like policy failures, are in the eye of the beholder. They are not mere facts but stories. Undoubtedly, \u2018events\u2019\u2014real impacts on real people\u2014are a necessary condition for their occurrence. But, in the end, policy successes do not so much occur; they are made. To claim that X\u2014a public policy, program or project\u2014is a \u2018success\u2019 is effectively an act of interpretation, indeed of framing. To say this in a public capacity and in a public forum makes it an inherently political act. It amounts to giving a strong vote of confidence to certain acts and practices of governance. In effect, it singles them out, elevates them and validates them. For such an act to be consequential it needs to stick; others need to become convinced of its truth and need to emulate it. The claim \u2018X is a success needs to become a more widely accepted and shared narrative. When it does, it becomes performative: X looks better and better because so many say so, so often. When the narrative endures, X becomes enshrined in collective memory through repeated retelling and other rituals. Examples of the latter include the conferral of awards on people or organisations associated with X, who then subsequently receive invitations to come before captive audiences to spread the word; the high place that X occupies in rankings; and the favourable judgements of X by official arbiters of public value in a society, such as audit agencies or watchdog bodies, not to mention the court of public opinion. Once they have achieved iconic status, success tales\u2014no matter how selective and biased certain critics and soft voices may claim them to be (see, for example, Schram and Soss 2001)\u2014serve as important artefacts in the construction of the self-images and reputational claims of the policymakers, governments, agencies and societal stakeholders that credibly claim authorship of their making and preservation (Van Assche et al. 2011)\u201d \u2014[Successful Public Policy: Lessons from Australia and New Zealand]

Given the importance of narratives, objective classification of policies into successes or failures becomes difficult.

Framework 2: A Fourfold Measure

Building on the previous framework, the editors develop a four-fold assessment in order to eliminate getting swayed by narratives alone.

Broadly speaking, programmatic assessment measures effectiveness and efficiency, process assessment indicates implementation capability, and political assessment measures narrative power.

I quite liked the fourth dimension. The temporal assessment, in the authors\u2019 words, looks at the policy \u2018not as a snapshot but as a film\u2019. Policies with desirable effects almost always need regular software updates to account for unintended and unanticipated consequences. Take the case of Minimum Support Pricing policies in the context of food shortage in India. It did achieve the programmatic, process, and political goals but failed the temporal test because it evergreened the subsidies for a few crops.

I recommend the book to anyone interested in policy engineering. I hope to do something similar in the Indian context to get out of a declinist policy discourse. Do you have any policy candidates in mind that meet the criteria outlined above?

India Policy Watch: Charging For Sedition Is Our Parampara\xa0

Insights on burning policy issues in India

\u2014 RSJ

Another week and another demand for a sedition case. This time it is from the left or the liberal wing. And their target is the eminent public intellectual Kangana Ranaut who in a discussion with another formidable intellect on Times Now claimed that India got her real azaadi in 2014 and what happened in 1947 was but a \u2018bheekh\u2019 (alms) that our generous colonial overlords had given us. This was enough. Demand for sedition charges poured in.\xa0

Is this sedition? In the world of social media whataboutery, all kinds of parallels were drawn with other cases where this government has filed charges of sedition. It is useful to go back into history a bit to understand sedition in India (Section 124-A of the IPC) and how it has evolved to become the ogre it is today.\xa0

A Brief History Of Sedition

The first documented case of sedition was back in 1891. In the Queen Empress v. Jogendra Chunder Bose case, the proprietor of a weekly Bangla newspaper Bangobasi was charged for articles that appeared in it. What sort of articles? Well, the colonial government was considering passing the Age of Consent Bill which sought to raise the age of consent for Indian girls to be subject to sexual intercourse from ten to twelve. Bangobasi saw this as an unnecessary intervention of the state into the customs of Hindu society and severely criticised it. This would have made an interesting case even today on how much the state should intervene in the traditions of a society. The jury was unable to reach a consensus and Justice W. Comer Petheram discharged the case and let out the accused on bail.

It is the next case that set the definition for sedition in colonial India whose imprint hasn\u2019t vanished yet. This was Queen Empress v. Bal Gangadhar Tilak case where Tilak in his newspaper Kesari had carried an article titled \u2018Shivaji\u2019s Utterances\u2019 that exhorted Indians to wake up to the foreign debasement of their culture. Tilak had sought for swarajya in his pages using Shivaji\u2019s ghost in heaven as the medium. The article had no direct call for action or incitement to disorder. The case came up before Justice Arthur Strachey of the Bombay High Court and he defined sedition in such broad and blatantly partisan strokes that it was almost impossible for the jury to return any other verdict than guilty. Tilak was sentenced to 18 months of rigorous imprisonment and a precedent was set.

Puraane Paap Once More

So, what were these broad strokes that Justice Strachey applied on sedition that continue to haunt us in independent India?\xa0

First, it was not necessary for the speaker (or writer) to incite people to commit acts of violence or insurrection against the state for it to be considered sedition. Just the intention to arouse negative feelings about the government was good enough. Mind you, this almost replaced the state with the government. Abusive language against the government, portraying it as corrupt or hostile to its own people or calling it partial could all be considered sedition. The presumed intention itself going literally by the words of the speaker could be considered seditious. It didn\u2019t matter if they were being used for irony or for satire. The real intent was irrelevant.

Second, the judgment introduced a new element in free speech debates. Who is the intended audience and what\u2019s their character? In Tilak\u2019s case, the Bombay High Court was convinced that since Tilak wrote in Marathi, he was talking to an ignorant and gullible class of people who could be easily swayed by the impassioned texts asking them to rise in revolt against the government. So, not only the presumed intent of the speaker was to be judged but also the intellectual abilities of the audience to decide on the seditious nature of a speech or a column.

Third, and quite incredibly, it didn\u2019t matter what the consequence of the speech or text was in deciding on sedition charges. The accused couldn\u2019t plead that no one actually developed any negative feelings against the government because of their speech. Nor was the truth relevant. The accused couldn\u2019t argue that what she was saying was the truth. What mattered was presumed intent and the possibility of an impact. Quite honestly, this wasn\u2019t any longer in the realm of law. This was metaphysics.\xa0

Yet, a large part of this interpretation of sedition is what remains with us till today. By the mid 19th century, sedition was a minor offence (\u201cmisdemeanour\u201d) in England and at its worst could attract a few years in prison. It was a bailable offence and there were rarely any convictions on charges of sedition in England by the time it was introduced as Section 124-A of IPC in 1870 in India. However, as we saw in Tilak\u2019s case, the colonial government interpreted this section in the most illiberal way possible. And the tone was set. In the debates at the Constituent Assembly, the speakers who were victims of sedition law under British rule, drafted Article 19(1)(a) and 19(2) to take the sting out of sedition charges.

After 1947, few of our Courts ruled against sedition charges that were brought up against the leaders of Hindu Mahasabha or the Communist Party for making inflammatory speeches against the state or against other communities that could lead to violence. These judgments spooked Nehru and others in his cabinet. The wounds of partition were fresh and the spectre of violence was all around. Nehru blinked and the First Amendment to the Constitution that curbed freedom of speech was passed in June 1951. This has been chronicled in Tripurdaman Singh\u2019s Sixteen Stormy Days - The Story of the First Amendment to the Constitution of India.

But this wasn\u2019t all. In the Code of Criminal Procedure that came into force in 1974, Indira Gandhi made sedition a cognisable offence for the first time in our history. Now, police could make an arrest on charges of sedition without a warrant. Sedition thus became a non-bailable, cognisable and non-compoundable offence in India. A triple whammy that both sides of the political divide are happy to apply to the other. And in last five years things seemed to have gotten worse.

Because in India, allegiance to free speech isn\u2019t about conviction. It\u2019s about convenience.

p.s: Contrast the 1951 buckling of the Indian government to what happened to the Sedition Act of 1798 that was passed in the US House of Representatives. Here\u2019s an excerpt from the House History website:

\u201cIn one of the first tests of freedom of speech, the House passed the Sedition Act, permitting the deportation, fine, or imprisonment of anyone deemed a threat or publishing \u201cfalse, scandalous, or malicious writing\u201d against the government of the United States. The 5th Congress (1797\u20131799), narrowly divided between the majority Federalists and minority Jeffersonian Republicans, voted 44 to 41 in favor of the Senate-passed bill. Federalists championed the legislation fearing impending war with France and out of the desire to hold the majority in Congress and to retain the White House, then occupied by Federalist John Adams.

In an era when newspapers served as political parties' chief organs, the Republican press was particularly vicious in its attacks on Federalists and the Adams administration. \u201cLiberty of the press and of opinion is calculated to destroy all confidence between man and man,\u201d noted one of the bill\u2019s supporters, John Allen of Connecticut. \u201cIt leads to the dissolution of every bond of union.\u201d Republicans defended the First Amendment protecting free speech and press. \u201cWhat will be the situation of the people?\u201d James Madison of Virginia demanded. \u201cNot free: because they will be compelled to make their election between competitors whose pretensions they are not permitted by act equally to examine, to discuss and to ascertain.\u201d

Signed into law by Adams on July 14, the law proved immensely unpopular with the public and the President lost re-election to Thomas Jefferson in 1800. Under the incoming Republican administration, the Sedition Act eventually expired on March 3, 1801; however, arguments made for and against it shaped subsequent debate about constitutional protections of free speech.\u201d

PS: Read more on sedition in edition #115.

HomeWork

Reading and listening recommendations on public policy matters

* [Article] Sedition in India: Colonial Legacy, Misuse and Effect on Free Speech from EPW.

* [Framework] BCG\u2019s Public Impact Diagnostic Tool provides another way to measure policy success.

* [Note] A Guide for starting a low-cost, primarily remote setup podcast.

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