The race for VIP perks has pernicious consequences and is undermining the elite's authority
Edward Said once wrote a short piece examining people in positions of power and responsibility who perennially occupied the "front rows" in life ("Private planes, power and privilege," Al-Ahram). He argued that the view from the front row was "inevitably a distorting one" because it ended up separating the elite from understanding the routine problems faced by ordinary citizens. Most people spend a great deal of their lives going through experiences that are, in Said's words, "neither pleasant nor edifying but are an inevitable part of being an ordinary citizen" - these include standing in queues, waiting at the hospital, paying bills, the stresses of daily commute and other chores. On the other hand, for public elites - politicians, bureaucrats and judges - occupying the "front rows" constitutes the perks of public office, which insulates them from the vicissitudes of ordinary life.
But perks can serve several positive purposes. Public institutions need talent. The enormous growth of salaries in the private sector has led to an increase in the opportunity costs of attracting and retaining talent in state institutions. Matching private sector salaries is unviable because severe wage compression in public employment is politically impossible to change. Perks provide a way out through non-transparent benefits. Furthermore, giving senior public functionaries front-row seats can preserve their energies for more important public purposes. If a minister, judge or a joint secretary spends a few more hours going over files rather than driving or standing in queues, it is not just defensible but also desirable.
Indeed, the corporate finance literature on perks in the private sector has rethought its earlier stress on perks as a mechanism for managers to misappropriate part of the firm's surplus, since perks were hard to observe and easy to fudge. More recent research, however, finds little empirical evidence of a systematic misuse of perks and, indeed, perks can have distinct incentive effects. Employees evaluate their psychological benefits separately from other monetary wage components and perceive perks as concern for their welfare and recognition of their performance, while firms use benefits to ease their employees' effort costs and to attract better employees.
Why, then, are perks for public officials in India a matter of concern? There are three broad reasons: the number of perks; the type of perks, especially those that confer "status rents"; and, finally, the link between perks and performance. Consider each in turn.
In 1996, following instructions by the Supreme Court, the Shetty Commission published a report on conditions of service of members of the subordinate judiciary. It examined perks for the subordinate judiciary: electricity and water charges; an orderly at home; a newspaper/magazine allowance; city compensatory allowance; robe allowance (where the commission discussed stitching charges of Gwalior versus Raymond); conveyance; sumptuary allowance; hill allowance to enthuse judicial officers to work in hilly areas; risk allowance to employees/judicial staff; leave travel concession; medical allowance; special pay; concurrent charge allowance; encashment of leave and leave salary; transfer grant/disturbance allowance; housing and house rent allowance; telephone facilities; loans and advances for house building, car purchase and "marriage advance, festival advance, advance for miscellaneous purposes like purchase of khadi/handloom cloth, warm clothing, etc"; conveyance advance; and personal computer advance. Whew!
Imagine just how much time members of the subordinate judiciary spend figuring out which allowance to take advantage of. The more perks there are, the more time the bureaucracy and the courts spend administering and interpreting them. The Supreme Court did exactly that from 1996 onwards - and, lo and behold, it found in 2010 that residential accommodation provided by governments based on these recommendations was fine, but judicial offices had become dilapidated. It's a pity that the place of work was not a perk.
The second concern is the type of perks. Take medical care. In the not-so-distant past, senior public officials got preferential access to major public hospitals, which at least ensured that these hospitals were built and maintained - thereby allowing ordinary citizens to benefit. However, some elements of the public system were de facto privatised by being "reserved" for "VIP duty" even as ordinary citizens were kept waiting. When V P Singh was undergoing dialysis, the machine was "reserved" and unavailable to other patients even when it was not being used by him - socialism is much better when practised on others. With the growth of corporate hospitals, healthcare perks were extended to availing their facilities. And, most recently, a new facility of medical treatment overseas for bureaucrats and senior police officers - put into place during a mounting balance-of-payments and fiscal crisis - is symptomatic not just of the chasm between rulers and the ruled, but also of what is happening to public healthcare - whose caretakers are the very people who seek to flee from it.
Housing is another perk gone amuck, which has been exemplified by the New Moti Bagh housing complex in New Delhi, the opportunity cost of which this newspaper estimated was about Rs 65 crore per dwelling. The first task of the innumerable commissions is to battle over perks - the entitlements of petrol and who can manage to get access to housing in the Diwan-e-Khas that constitutes Lutyens' Delhi. Senior officials, ministers and members of Parliament drag their feet when it comes to vacating government houses after retirement or demitting office. Others hold on to prized official quarters in New Delhi, even though they are no longer posted in the Capital.
But perhaps the most insidious of the perks that have overgrown like poisonous weeds are the "status perks" - in other words, the lal batti syndrome that gives exemption from rules that should apply to all. Witness the number of Indians with high self-regard who express outrage at being treated as mere mortals and at being questioned or searched in foreign airports. This attitude was epitomised recently by Uttar Pradesh minister Azam Khan, who was questioned by a female immigration officer. Imagine if she had expressed outrage at his behaving as Indian males in power seem to behave with female subordinates. More than six decades after Independence, from courts (such as the Madras High Court) - where judges are preceded by an orderly who runs in front of the judge through the corridor to warn people of "your Lord's arrival" - to the VIP entrances at major temples and shrines - where it is unclear which lord is paying obeisance to which god - the colonial ideal of separating rulers from the ruled is deeply resonant among India's ruling elite.
Finally, the expansion of perks has little to do with performance. When Robert Vadra, a private citizen, is named in airport billboards as being exempt from security checks "while travelling with SPG protectees", the de-linking is complete.
The consequences are, unsurprisingly, pernicious. First, the nature of perks insulates India's public elites from the cares of ordinary life, and results in less empathy with and understanding of the travails of regular citizens. Moreover, the life of comfort creates unhealthy incentives to remain in the "front row" by retaining power with the desperate search for post-retirement jobs - and resultant compromises - to retain these perks.
In a status-obsessed society, perks have abetted an ever more brazen "VIP culture" in India. Former judge Ruma Pal identified "hypocrisy" as one of the cardinal sins ailing the judiciary. It is an affliction that is deeply entrenched among India's public elites and is eroding the very legitimacy of their authority.
Candidates in the current state elections must be made to offer specific promises against which their performance can be measured