Silos are yet to be broken to expeditiously deliver projects and policies

Lack of coordination between depts and ministries within the govt on the one hand, and between the Centre and the states on the other, has proved to be a hurdle

Prime Minister Narendra Modi has been emphasising on breaking silos among ministries and departments to move things faster, but various policies and projects have been stuck due to differences within the government or between the Centre and the states.

Lack of coordination between departments and ministries within the government on the one hand, and the Centre and the states on the other, has not cropped up only with the current regime only, but is a legacy inherited from the past. In fact, there are examples of nodal ministry and a public sector unit (PSU) under it locking horns over contesting matters, not to talk of inter-ministerial or inter-departmental divergence of opinion.

For instance, then ONGC Chairman Subir Raha had threatened to quit in 2005 when the petroleum ministry tried to nominate two more directors on the board of the oil PSU. He continued in his post only after then petroleum minister Mani Shankar Aiyar relented. One of the proposed directors was Director-General Hydrocarbons (DGH) V K Sibal. Saha had said that nominating Sibal was akin to nominating the Sebi chief on a company board.

Modi has time and again called upon bureaucrats to break the silos to push the government's development agenda. There was some success when PM Gati Shakti, a national plan for multi-modal connectivity, was launched a year back, involving 16 infrastructure ministries including the Railways and Road, Transport & Highways.

Earlier in 2015, the National Transport Development Policy Committee (NTDPC), headed by Rakesh Mohan, had recommended formation of a high-level and independent Office of Transport Strategy (OTS).

Mohan, now president of the Centre of Economic and Social Progress (CESP) and part time member of the economic advisory council to the prime minister (EAC-PM), said the committee had observed that unlike most large countries India does not have a single ministry for transport. There are a host of ministries such as Railways, Road Transport and Highways, Shipping, Port & Waterways, Ministry of Housing and Urban Affairs.

Due to historical reasons it would not be possible to have a single ministry for transport, so the committee had suggestd creation of OTS, he said.

The two recommendations did not find traction that time since the new regime had come, but experts said this was created in a new avatar of PM Gati Shakti.  

Another success was the announcement of the CRs six trillion asset monetisation pipeline last year for 2021-22 to 2024-25. Niti developed the pipeline in consultation with infrastructure line ministries including power, road transport and highways, shipping ports and waterways, mining, coal, housing and urban affairs.

More recently, a "rojgar mela" (job fair) was organised last week to offer employment to 75,000 youth across 38 ministries and departments, including banking, customs, Railways, home, the labour and employment, Central Industrial Security Force, and the Central Bureau of Investigation. A total of one million youth would be given jobs in the drive.

However, this is only a part story.

Important policies such as e-commerce and pieces of legislation such as DESH Bill have been held up over lack of consensus among ministries and departments.

The e-commerce policy, the draft of which was floated by the Department for Promotion of Industry and Internal Trade (DPIIT) way back in 2019, could not see the light of the day since other offices such as the Department of Economic Affairs (DEA) under the finance ministry and Niti Aayog aired different views.

DEA described the proposal, which sought to control a push to promote private-label brands and raise scrutiny of relationships between online marketplace operators and their vendors, as excessive and without economic rationale.  

Then NITI Aayog vice chairman Rajiv Kumar also shot off a letter to Commerce and Industry minister Piyush Goyal, saying the rules could hit small businesses, and that they sent the message of unpredictability and inconsistency in the government's policy-making.

The Development of Enterprise and Services Hub (DESH) Bill, which was to replace the Special Economic Zone Act, is expected to be the next casualty, as the finance ministry has raised concerns over the tax concessions proposed and integration of hubs with domestic tariff areas without export obligations.

Besides, differences between the finance and commerce ministries have led to a delay in generating crucial foreign trade data. The delay was because the electronic portal of customs — Indian Customs Electronic Gateway (ICEGATE) — has not been sharing key information such as shipping bill number and date, bills of entry number in the daily trade return since October 7.

Infrastructure projects were the biggest casualties of lack of coordination among departments and ministries despite the progress made in Gati Shakti and asset monetisation pipeline.

In fact, the empowered group of secretaries under PM Gati-Shakti in June had pulled up the highways and railways ministries for their poor performance in completing port connectivity projects, which are a crucial link to reducing the cost of logistics. Some of these projects were not taken up even after 28 years of being commissioned.

Bharatmala, the government’s flagship highway building programme, has seen its costs almost double to Rs 10.63 trillion. Industry estimates attribute many of these overruns to delays in land acquisition and completion of stakeholder due diligence. All infrastructure projects require a geographical feasibility report, techno-economic feasibility test, and detailed project reports. Government data shows that seven years since Bharatmala was announced, nearly 40 per cent of highway projects have not even been awarded for construction yet. Rating agency ICRA attributed these overruns to delays in land acquisition, among other factors.

Similarly, the Sagarmala project, envisioned to transform India’s marine economy, has also seen several delays due to lack of timely inter-departmental cooperation. Business Standard previously reported that 10 public-private-partnership (PPP) port projects worth almost Rs 7000 crore got delayed due to tardy pace of security clearances by other government bodies, including ministry of defence, home affairs, and external affairs. These delays ended up impacting the Centre’s national monetisation pipeline proceeds from ports and shipping in 2021-22.

Delays in land acquisition are also often caused by lack of Centre-State coordination. The flagship project of Indian Railways — high speed rail or bullet train — was stalled for years due to the lack of clearance for land from the then opposition-ruled Maharashtra government. The clearance was granted within days of the Eknah Shinde-Devendra Fadnavis government taking charge.

According to a report by the Ministry of Statistics and Programme Implementation (MoSPI) which monitors infrastructure projects of Rs 150 crore and above, 384 such projects of the total 1,514 have been hit by cost overruns of more than Rs 4.66 trillion till June 2022. As many as 713 of these projects were delayed.

Reasons for time overruns as reported by various project implementing agencies include delay in land acquisition, delay in obtaining forest and environment clearances, and lack of infrastructure support and linkages.

Way forward:

As is clear from the problem, the solution lies in some kind of coordination mechanism among ministries and departments as well as the Centre and the states and local authorities to smoothen the execution of various projects and implementation of policies in the country.

But what kind of coordinating agency should it be?

At a discussion on a report : ‘Competitiveness Road Map for India@100’: former Procter and Gamble India chief executive Gurcharan Das said it should be a deputy prime minister who would coordinate among different entities to raise competitiveness of the economy.

"The competitiveness touches every central ministry, and every state government. We know that these are silos and these are unwieldy structures. The only coordinator in our system is the prime minister. Even he does not have much control over the chief ministers of states. I have a suggestion which many of you will find controversial. It is to have a competitiveness czar at the level of a deputy prime minister of the country," Das had said.

India last saw deputy prime minister when L K Advani occupied the post during 2002-04.

Amit Kapoor, co-author of the report, told Business Standard there are close to 70 ministries and departments at the central government level.

For instance, for the energy sector there ministries such as petroleum, coal, power and renewable energy which want to achieve the same set of goals, said Kapoor, who is chairman of the Institute for Competitiveness that brought about the report. He said this is true of the transport sector too.

"Can we look at the situation where there is one big minister and then you have ministers of state who look at departments which would help in coordination mechanism?" said Kapoor, a professor at Stanford University.

Then there is requirement of coordination vertically too, he said adding sometimes the state governments will not implement central projects due to political reasons even as those would create development projects.

Kapoor believed that it is the prime minister who should drive the coordination from the central side and chief ministers from the states level.  

--With inputs from Dhruvaksh Saha