Paper leaks: A state capacity problem

Setting aside the question of the necessity of national qualifying examinations, high-quality parastatal agencies are essential to administering them reliably

There is a furore over the administration of examinations. The public discourse has generated proposals intended to improve the system. The solutions receiving attention range from the implementation of blockchain technology to the enhancement of criminal penalties for malpractice. The discourse requires the application of sophisticated knowledge regarding state capability and institutional design and not knee-jerk, ad-hoc solutions. 

 We must start with the bigger questions. The difficulties observed in the testing process arise from unaddressed foundational questions in higher education policy. The necessity of centralised admissions requires centralised evaluation. In a modern economy and society, autonomous universities select their students. A single national test assumes a uniformity that ignores institutional diversity. Furthermore, the supply of higher education is constrained by regulatory barriers that make it difficult for new participants to establish universities. This artificial scarcity raises the stakes of the admission process, generating high incentives for malfeasance. If supply were elastic, the pressure on a single gateway examination would decline.

If selection from a surplus of applicants is the objective, the use of lotteries is an attractive mechanism in public policy. If a standardised test is deemed necessary, building a state agency is not the only administrative option. The Educational Testing Service (ETS) administers examinations like the GRE and SAT globally with reliability. The state could procure testing services from established commercial vendors rather than attempting to construct a testing apparatus from scratch. These fundamental questions require resolution. Downstream failures in testing are symptoms of these upstream policy choices. For now, we will not address these bigger questions.  

Assuming the policy choice is a government-run nationwide examination, the administration faces a state capability problem. Running a secure, large-scale logistical testing operation requires high managerial capacity. The National Testing Agency (NTA) lacks this capability. Public administration theory provides a framework for understanding this deficit. 

An analysis of the NTA through the lens of institutional design reveals structural defects. The NTA was established in 2018. It was not created through a statute but was constituted as a society under the Societies Registration Act, 1860. The administration is entrusted to a governing body chaired by a former Union Public Service Commission chairman. An Indian Administrative Service officer serves as the director general and member secretary, alongside ex-officio part-time directors.

This structure lacks operational depth. The agency has handled over 270 competitive examinations and more than 66 million candidate registrations since its inception. It attempts this logistical operation with a sanctioned strength of 39 permanent posts. All these posts are designated to be filled through deputation. 

Currently, 24 of these permanent positions are occupied. To manage the operational workload, the NTA relies on a temporary workforce. It employs 73 contractual personnel, including consultants, and 124 outsourced staff handling data analysis and administrative support. An agency executing sensitive state functions operates with 197 non-permanent staff, managed by a core of 24 public servants on deputation. The over-reliance on temporary and outsourced personnel is a design flaw. 

The legal form of the organisation has consequences for governance. A society operates without the statutory framework that characterises standard regulatory bodies. Statutory bodies have internal financial controls and external accountability protocols embedded in their founding legislation. The NTA lacks this architecture. 

Because it is not a statutory body, it is shielded from routine parliamentary scrutiny. There is no legal mandate requiring the NTA’s annual administrative and financial reports to be tabled and debated in Parliament. Its accounts are not necessarily subjected to the mandatory, exhaustive auditing mechanisms of the Comptroller and Auditor General of India (CAG) in the manner of a government department or a statutory authority. The absence of these feedback loops ensures that structural weaknesses, such as personnel shortages and operational vulnerabilities, remain hidden from formal parliamentary scrutiny until a systemic failure occurs. 

Advanced economies approach the creation of public agencies with systematic protocols. The United Kingdom (UK) utilises the framework of Non-departmental Public Bodies (NDPB). This term was coined in 1980 following a report by Sir Leo Pliatzky. An NDPB has a role in the processes of national government but operates at arm’s length from ministers. 

In the UK, the Cabinet permits the establishment of a new NDPB only when it is demonstrated to be the most cost-effective means of executing a specific function. The relationship between the NDPB and its sponsor department is defined to support delegation while assuring the accountable minister of financial propriety and risk management. The bodies are reviewed regularly to verify that their functions remain necessary. 

Over time, a taxonomy of public bodies has emerged in the UK, classifying them as Executive NDPBs, Advisory NDPBs, Tribunal NDPBs, Public Corporations, and others. This classification determines accountability, funding, and reporting arrangements. Appointments to executive NDPBs are governed by strict codes. They are empowered to employ dedicated staff and manage their allocated budgets. This builds the permanent institutional memory and capacity required to execute a mandate efficiently. In the UK legal and constitutional scheme, statutory status is not required for the checks and balances described above. 

The administration of public services in India requires a standardised, statutory framework for the creation of delivery bodies. Agencies entrusted with sensitive functions cannot be structured as loosely governed societies dependent on outsourced labour and borrowed bureaucrats. They require statutory backing, a permanent and specialised cadre, internal controls, CAG audits, and direct accountability to Parliament. Flawless public service delivery is a downstream product of flawless institutional design.

The difficulties at the NTA are not isolated. The Indian governance landscape contains hundreds of organisations constructed with similar institutional deficits. The intellectual toolkit of new public management, grounded in the establishment of checks and balances, is frequently absent. The apparatus of the state moves from failure to failure owing to these gaps in administrative knowledge. While the immediate focus is on the testing agency, similar vulnerabilities exist across the structure of public administration. A superior body of knowledge, with an understanding of state organisations and their checks and balances, is required in the journey to state capability.  

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The writer is an honorary senior fellow at the Isaac Centre for Public Policy, and a former civil servant