How India's centralised bureaucracy undermines its federalism

In January 2022, the Centre proposed an amendment to the Indian Administrative Service (Cadre) Rules, 1954, which would allow the Union government to command the services of an IAS officer in the “central” government overriding consent (as required by current rules) from the state government or the bureaucrat concerned.

The proposal fast became a flashpoint in the centre-state battleground. The amendments, state governments are arguing, fundamentally undermine the federal spirit embedded in the design of the All India Services. In doing so, they effectively centralise the bureaucracy.

Against the backdrop of increased centralisation in India’s polity, this latest flashpoint is an important reminder of the significance of India’s elite bureaucracy, and particularly the IAS, in shaping the dynamics of India’s federal compact. The bureaucracy, by its design, through its culture and consequent relationship with politics, is a critical instrument in determining (and often undermining) federal relations. Yet our debates on federalism only peripherally engage with the question of the bureaucracy and its relationship to political centralisation.

Here, I offer an initial exploration of these relationships to argue that the culture of centralisation has deep roots within the bureaucratic hierarchy, which, in turn, serve to aid and abet political centralisation. Understanding the bureaucracy’s penchant to centralisation is critical to understanding the nature and form of political centralisation in India.

Original design

The All India Services, of which the Indian Administrative Service is the most coveted, was designed to serve as the administrative conduit between Centre and states, and in this sense remains core to the federal schema laid out within the constitution.

In its original design, the Indian Administrative Service is meant to be “All India” in name and character. For this reason, the Centre does not have a cadre of its own. Instead, it relies on a proportion of officers who are “deputed” from states for a period of time. The objective is to ensure adequate representation of state priorities in policymaking decisions at the centre whilst ensuring that state administration engages with national challenges.

Under this structure, accountability is shared between Centre and state (or dual control in Indian Administrative Service parlance). Cadre management (recruitment and allotment) is under the central government. Through the bulk of their career, the Indian Administrative Service is expected to principally serve and, hence, be accountable to state governments for performance. This is how the federal balance was sought to be maintained. As an aside, the proposed amendments, by giving the Centre powers to override state government views on transfers, upend this delicate balance.

In practice, a combination of political dynamics and the everyday realities of cadre management (balancing public interest, the needs of the “All India” character of the service, and personal life circumstances of officers) have undermined the original design objective of an “All India IAS” in name and character. Perhaps the original design tried to balance far too many considerations but, as a result, Cadre representation in the Centre tends to disproportionately favour a cluster of states (Himachal Pradesh, Bihar, Kerala and the North East) and vacancies at the central government level (compared with allotted posts) has always been large, particularly for junior posts (deputy secretary to joint secretary).

In the present moment of heightened political centralisation, these endemic challenges to the original design have proven a useful instrument to deepen centralisation. Several key posts in the Government of India are now occupied by senior officers from the Gujarat cadre who were loyal to the Prime Minister in his chief ministerial avatar. Moreover, the persistent manpower shortage at the Centre has created a legitimate opportunity for the proposed amendments. In addition, to bridge the manpower gap, several non-IAS cadres (forest and railways) have been empanelled and now occupy positions that were traditionally the IAS stronghold.

There are differing perceptions about the significance and effectiveness of these changes. On one hand, removing the IAS stronghold in policymaking can induce much-needed competition. On the other, it deepens centralisation by undermining the objective of bringing state representation into national policymaking. Politically, it also builds regime-specific loyalty, thus breaking the dual control accountability structure.

Dual control

One of the most visible forms of centralisation in the Modi government is the increased direct engagement between bureaucrats at the Centre and the grassroots. Aided by technology, a new accountability system is being crafted that bypasses the State government altogether. Through this direct accountability, welfare politics and credit attribution for welfare schemes have been centralised.

How has this been achieved? And why have the checks and balances of dual accountability built into the original design failed to contain this centralisation? The answer can partially be found in Indian bureaucracy’s well-known penchant for rules, orders, and hierarchy – which privileges a culture of centralisation in its everyday administration. It is not uncommon to hear bureaucrats across all levels of the administrative chain repeatedly describe themselves as “no more than post officers” responding to commands from their bosses.

Getting “work done” in this culture is about command and control. “Command and control centres” form legitimate parts of the administrative departments in states and at the Centre and are tasked with monitoring bureaucrats and tracking progress using the finest 21st-century technology. Discretion is akin to encouraging corruption.

In fact, the realities of corruption, inefficiency and weak state capacity have, together, served to entrench command and control. Centralisation is legitimised as a necessity for efficiency, checking corruption and enabling accountability. Or as American economist Lant Pritchett describes it, enabling “accounting” to substitute for accountability. This is one reason why decentralisation to local governments is actively resisted by the bureaucracy.

Tug-of-war

In this culture, for bureaucrats, direct engagement with grassroots is a legitimate, arguably necessary condition for ensuring an efficient and accountable administration. And the political masterstroke lies in the Bharatiya Janata Party’s ability to effectively leverage this centralising accountability culture to their political advantage.

Bureaucrats have, thus, rarely been champions for the federal cause in everyday administration, contributing, perhaps inadvertently, to entrenching conditions for political centralisation. This is best evidenced in the tug-of-war over Centrally Sponsored Schemes, the primary fiscal instrument through which welfare schemes are financed by the central government and through which welfare politics has been centralised.

These schemes, although a political bone of contention between the Centre and states, are designed by bureaucrats at the Centre and have long-entrenched a culture of administration that casts state governments as implementors, accountable for delivery to their central government bosses.

Even basic expenditures are carefully controlled by the Centre and, as a result, state governments have little incentive to invest in their own planning capacities. A vicious cycle has ensued. The lack of institutional capacity, particularly in poorer states in North India, legitimised central government bureaucrats’ role in micromanaging state activities.

Without bureaucratic champions for deeper fiscal autonomy at the state level, political demands for greater fiscal devolution have not translated into deepened federalism. Despite two successive finance commissions recommending enhanced tax devolution to states and the rationalisation of Centrally Sponsored Schemes to empower states to direct expenditure according to their felt needs and priorities, schemes continue to expand and dominate welfare expenditure. The stubborn persistence of the status quo is a consequence of the near-perfect alignment between the prevailing bureaucratic culture and the political incentives for deepening centralisation.

I have often described India’s federal compact as a tug-of-war between the pulls of centralisation and the democratic pressures of decentralisation. But it is important to recognise that the forces of centralisation are deeply embedded within the structures of state institutions. When democracy lends itself to greater centralisation, as India is witnessing today, state institutions do not serve as effective checks. Rather, they are more often than not pliant partners.

Yamini Aiyar is President and Chief Executive of the Centre for Policy Research, New Delhi.

The article was first published in India in Transition, a publication of the Center for the Advanced Study of India, University of Pennsylvania.

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