Notes from the Other Side

Photograph by Uroš Jovičić

There is a brick wall between careers in the corporate and government worlds in India. Besides the IAS bridge, my peer group did not think of crossing thiswall. It raised a few eyebrows when I joined the Central Electricity Regulatory Commission (CERC) as a consultant for Renewable Energy (RE) in May 2015. Reactions from friends varied from disbelief to wonderment. Here I was with family, moving from Berkeley to New Delhi to help lay the foundation of a sector with the audacious goal to reach ‘175 GW of renewable capacity by 2022’.

“Why is it so hard for our government to move the needle?” was a big question that drove me to the ‘other side’. I was particularly intrigued by the power sector. Even after 65+ years of independence and decades of government programs, ~300 million Indians did not have access to electricity in 2014 [1]. In fact, India saw the largest grid failure in the history of mankind in 2012 [2]. Is it sheer lack of capacity or willingness, is it corruption or is there more? In this article, I share the answers that I have found so far.

Turns out, there is a lot more to it. In two years, I realized that many of my colleagues in the government agencies work as hard, if not harder than my corporate colleagues. Many of them are subject matter experts and well versed in international technology trends and best practices. They are the people with the greatest overall understanding of the issues and problems in their sector and have the best of intentions.  In fact, I count some of our leaders as the best that I have personally worked with.

Turns out, there is a lot more to it. In two years, I realized that many of my colleagues in the government agencies work as hard, if not harder than my corporate colleagues.

The government machinery of our large and diverse country is huge and complex. There are systemic issues that prevent the government agencies from moving fast(er), taking bold decisions and executing plans on the ground. I am enumerating a few issues I have witnessed first hand:

Lack of Empowerment

All decisions are made at the top. Even the smallest decisions and related information funnel to the top. Imagine that your company needs to run a Facebook campaign for a day and you have to go to the CEO for approval. Not only does it create a bottleneck by design, it conditions middle management to shirk responsibility and defer decisions on matters big and small. After decades of being in the system, most people lose the ownership mindset and capacity to take initiative. They rely on their boss to take the call and spoon-feed instructions to make things happen, thus creating a vicious circle.

Work gets further paralyzed with bad apples in the system. Though technically there are processes to deal with it, they are so long drawn and painful that one must accept the team they inherit and do their best. On several occasions, I’ve felt bad for the IAS officers at a Ministry where the Joint Secretary is expected to deliver insane outcomes with an under-capacity or sub-par team. Not only are they stuck with a team they might not believe in, they cannot hire people from outside the system and give them industry competitive salaries [3].

Decision-making in the government has to be more deliberate and slow because the cost of failure is high.

Decision-making in the government has to be more deliberate and slow because the cost of failure is high. Radical changes are risky. However, getting the decisions through a hierarchical and serpentine system force delicate maneuvering and strategies that are counterproductive.

Lack of empowerment is worst at the institution level. Many government agencies simply do not have the powers to create (permanent) posts and hire requisite resources.

Culture of Mistrust

Ours is a culture of mistrust. We are always on guard because of ‘caveat emptor’- let the buyer beware. Ekta Kapoor is a media baron for portraying Indian families as a house of cards standing on shaky bonds of mistrust. This deep-rooted second nature manifests itself in various ways and seriously impedes the functioning of this mega machinery.

When I first came to New Delhi, there were several ecosystem shocks awaiting me, one of them being the lack of synergy between the government and public sector stakeholders. Rooted in mistrust, the posturing, power dynamics, leverage and manipulation were up for display.

To forestall corruption in spending of public money, the checks-and-balances pendulum has swung to the other side. The scare of audit questions and possible consequences thereof loom large over every decision and signature by public servants. There is so much experience that goes into critical decision-making but even simple decisions (e.g. hiring a consultant) become mammoth issues.  Every coin has two sides, but I mostly get to see the dark side of the nebulous audit monster.

Every coin has two sides, but I mostly get to see the dark side of the nebulous audit monster.

Then comes the vicious cycle of mistrust between government and industry. Let me give an example of the regulatory commission where I work. Our regulations are as good as the data that we can lay our hands on. Traditionally, in the cost-plus-regime that the power sector has followed in India (and in many other countries), CERC has relied on data from various sources, public and private. During the consultative process, all industry players submit data on capital cost, O&M etc., that the Commission is bound to respond to at the time of decision. Never mind that in all my casual phone/street conversations with industry, I infer that costs are way lower than those quoted in the formal submissions. While the Regulator is forced to make informed guesses, the industry continues to misrepresent ground realities to squeeze out every additional rupee of profit.

As a regulator, one has to balance interests of all stakeholders. Au contraire, companies are straight-jacketed in their thinking and put short-term self-interest ahead of the long-term welfare of the sector as a whole.

Federal Structure

The federal structure of our democracy is a source of resilience for our country. Our founding fathers understood the diversity of this land and distributed power between the Centre and the States. The flip side of this is the lack of aligned policies on a concurrent subject such as power. The translation of vision at the Centre into ground realities at the State level becomes very complex due to lack of direct jurisdiction. Plans fall apart when the rubber hits the road. This is due to permutations of policies/regulations, idiosyncrasies of institutions in different States, and lack of capacity or simply unworkable design because the Centre is far removed from the ground. The electricity grid being interconnected (we have one national grid) magnifies this complexity for the power sector.

HR and Work Processes

 Many of the things we take for granted in the corporate world are luxuries if one is working for the government. For one, there is no focus on human resources, which reflects in decisions of managers and motivation levels of employees. The culture is primarily all stick and no carrot. There is plenty of bashing when a miss happens, but I’ve hardly seen any praise or acknowledgment of work (except at farewells!). Imagine the alignment of incentives due to that.

Team is severely under-staffed [4] for the quantum of work, which means that one is always playing catch up and juggling many balls to ever do a good job. When I started at CERC, I used to fret about lack of time to do research and cost-benefit analysis in the run-up to framing a regulation. Days get filled up with so many tasks and firefighting that important long-term priorities get relegated to the background.

The government is also a microcosm of the Indian society and the fractious democracy we are.

The sum total of factors above makes for a sclerotic system in which it is hard to be effective. The government is also a microcosm of the Indian society and the fractious democracy we are. Having said that, the work that one does directly translates to (hopefully positive) impact on society, and that keeps you going.

The corporate and government worlds are driven by two disparate Systems of Survival [5].Both sides need to expand its horizon by borrowing a page from the other. While the government teams can do much better with conscious streamlining, this is a good time to add variables to the corporate objective function to make it more holistic.

[1] The Ministry of Power has been running an aggressive village electrification program since 2014 under ex-Minister Shri PiyushGoyal. However, that does not automatically translate to household electrification; an accurate recent count of unelectrified households is hard to find.

[2] Grid failure/blackout on 31^st July 2012 affected over 620 Million people in India, or 9% of the world’s population (out of which over 320 M had access, and remaining were off-grid)

[3] One of the reasons quoted for success of governance in Singapore is that the government attracts the crème-de-la-crème, who are paid more than industry benchmarks.

[4] CERC has a mere 80 full-time-employees (including consultants a strength of ~150), compared to 1200 employees at FERC, the equivalent central regulator in the US, for example

[5] Guardian vs the Commerce Syndrome by Jane Jacobs https://en.wikipedia.org/wiki/Systems_of_Survival