Five Challenges to Corporate Who look at Government as Inefficient?

It is quite fashionable for everyone today, particularly the business houses and corporate to criticize Government in democracies. Michael Mandelbaum, an American Professor and author aptly said, "Criticizing government is a God-given right - at least in democracies". We find the media, common man, intellectuals and even judiciary criticizing government every day. Criticizing government is the favourite pastime in India. Politicians and government officials are often portrayed as inefficient, corrupt, ruthless and insensitive people who are destroying the country.
Recently investment bank Goldman Sachs has estimated that if civil services can be reformed and the bureaucracy can be merit-based rather than seniority-based, India could add nearly a percentage point to its GDP growth rate. Goldman Sachs used the World Bank's latest Worldwide Governance Indicators (WGI) data to reach at the estimates. The Figure below shows the aggregate indicator of Government Effectiveness in last 20 years. The dotted lines indicate the margin of errors.

It is evident from the figure that the government effectiveness has almost remained stable at around 50% in last 20 years even though there had been several changes in the Government at Center and State in the given period. This indicates that political parties may change, government officers may retire and replaced by new ones, but the governance remains as it was earlier-ineffective and inefficient.
It is easy for the private businesses and corporate houses to criticize Government functioning and show-off their efficiency, but little are they aware of the extra-burden that Governments in India has to carry, while they are free. If you ask even the best athlete to carry a 50 kg load on his head while participating in a race, he surely can't match an athlete who has no load to carry or carries a much smaller load.
If any corporate thinks that they can be more efficient than government in the similar situations, let them take the five challenges of governments in India.
1. Social Justice Challenge
It is easy for the private corporate to hire a person based on merit while government has to provide reservations to the weaker sections of the society. The reservation is usually 50% of the intake and applicable even in course of promotions. It is difficult to avoid reservations in India, which is provided by the Constitution of India. All attempts of government to bring reservations in private sectors have been met with severe resistance by the corporate as they know the impact of reservations on efficiency. Yet they expect governments to be as efficient as themselves.
Whether any corporate can dare to provide 50% reservation and still provide efficiency at par with governments?
2. Salary-Gap Challenge
A typical feature of government is that the difference between the salaries of the highest paid government employee and the lowest paid employee is very high. In the Sixth Pay Commission, the lowest salary was fixed at Rs 7000 per month while the highest salary was Rs 80,000 per month, which is less than 12 times to the lowest salary.
However, the story is quite different in corporate. For example, the newly-appointed Infosys CEO Vishal Sikka has been given an annual salary of USD5.08 million (over Rs. 30 crore) and USD2 million in stock option. Since the entry level salary of Infosys is around 3 lakhs per annum, the top man is paid more than 1000 times more salary than the lowest employee. In most of the corporate, the ratio is more than 100 times.
Can any corporate dare to reduce the salary-gap to match the government level of 1:12?
3. Employee Protection Challenge
A private sector is not only free to hire any person but also free to promote, demote and even sack any person at will. Many corporate can sack their employees even by giving one day notice. However, all the employees of the Government of Center and State are protected by the Constitution (Article 311), which provides-‘No employee shall be dismissed or removed or reduced in rank except after an inquiry in which he has been informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges'. Every government employee can approach the Tribunals and Courts to challenge the order of the Government and get the order quashed.
Can any corporate dare to provide similar level of employee protections to its people?
4. Transparency Challenge
All actions of government are transparent and subjected to scrutiny by various constitutional authorities like Comptroller and Auditor General (CAG) of India, CBI and various courts. Any Citizen can get the information of the government files under RTI Act. The details of all government employees are available on their website.
On the contrary, there is no transparency in private sector. No private sector top officials name can be found in their websites. They can give their contract to anyone, employ anyone, promote anyone and sack anyone without owning an explanation to anyone. What about the corporate governance? Whether, the shareholders of the company are not entailed to know what is done in their company and why?
Whether the corporates are willing to accept audit of their company every year by a statutory body like CAG and disclose all the information to the citizens under RTI?
5. Democracy Challenge
A good government is one which is of the people, by the people and for the people. In government, all the heads of executives are elected by people. However, most of the corporate are owned by families in India, who pass on their company to their children like a personal property. The shareholders have no role in selecting the Chairman, Managing Directors, Directors or the CEOs. Unlike corporate, the political parties have to go to the public for their votes every five years. Unlike shareholders, all citizens have equal power of voting in democracies and they are equal stakeholders in democracies.
Whether the corporate is willing to choose the office functionaries amongst their shareholders by voting &giving them equal rights?
Understand, Not Criticize
Dale Carnegie, the author of classic "How to Win Friends and Influence People" said wisely, "Any fool can criticize, complain, and condemn-and most fools do. But it takes character and self-control to be understanding and forgiving." Instead of criticizing, why not try to understand Governments for what they are and try to find ways to improve it. If you ignore the extra burden that governments carry in democratic societies, you fail to understand them properly. A story of Mahabharatha illustrates this point.

During Kurukshetra war, when Karna's arrow used to hit the Arjuna Chariot, it used to merely shake the chariot a little bit. However, when Arjuna's arrow used to hit the Karna's chariot, it used to go behind many yards because of the impact of Arjun's arrow. Yet Lord Krishna always praised Karna more than Arjuna.

Once Arjuna showed his displeasure to Lord and asked why he praised Karna more than him.

Lord Krishna said - ‘In your chariot, Lord Hanuman is sitting on top of your chariot. I, the Lord of Three Worlds' is sitting with you. Yet Karna could shake your chariot with the power of his arrow. That is why he deserves more praise than you'.

If only, people can understand the extra responsibilities Governments have to carry, they can appreciate the functioning of the government. If the efficiencies of Indian bureaucracies are less, it is because they have to carry much more burden than the governments of developed countries. Unless, these burdens can be lightened, efficiencies can't go up.

Originally Published on Taxindianonline.com on 1st December 2014