Making the operating environment congenial to efficient functioning of the services will undoubtedly require wide-ranging steps, including those related to higher defence management, to be taken but the efficacy of all those steps would always depend on devolution of power.
Devolution of power entails decentralization of administrative authority and delegation of financial powers, which must complement each other. Since the environment keeps changing the ministry of defence (MoD) should also be geared to respond promptly by tweaking the existing scheme of devolution to meet the new challenges. Sadly, this does not seem to be the case as of now.
The effort to set right the operating environment, therefore, has to start with creating a mechanism to review the existing devolution of power comprehensively based on clearly defined principles and not in an ad hoc and disjointed manner as has been the case so far.
The fundamental principle has to be empowerment of the services. The authority to carry out all core functions assigned to them must vest in the units and formations. They should be able to carry on without any let or hindrance. This may require greater devolution even within the services with the authority to carry out a task fully vesting in the functionary who is responsible for carrying out that task.
Viewed from this perspective, the present system of devolution is flawed. Those responsible for carrying out a task are not always fully authorised to take all decisions relating to that task and/or do not have full financial powers to spend the money sanctioned for carrying out that task.
MoD and even the services headquarters (SHQs) need not involve themselves in day-to-day functioning of the units. Take, for example, office contingencies and miscellaneous expenditure. Presently, even the commander-in-chief of a naval command does not have full financial powers to sanction expenditure on running of his establishment. If the expenditure involved is more than INR 20 lakh, he has to seek the approval of the vice-chief of naval staff but even the latter can sanction expenditure only up to INR 25 lakhs. Beyond this, full power vests in the joint secretary in MoD!
The point is not whether the ‘per transaction’ limits presently prescribed are adequate or not. These may well be quite adequate. The question that needs to be asked is: what is the value addition in such cases at the higher levels. What is the kind of scrutiny that a joint secretary in MoD could subject a proposal to that cannot be carried out at the level of the commander-in-chief who is a three-star officer?
MoD and the SHQs must focus on policy making, including the policy underlying devolution of authority, leaving day-to-day running of units and establishments to the functionaries at the command and lower levels. The authority to carry out a task must vest in the functionary who is responsible for carrying out that task. This, then, has to be the second guiding principle. No authority should vest in a higher echelon unless the reason for doing so is clear (as in the case of capital acquisition), in which case it should be known to functionaries exercising the powers in MoD and SHQ what is expected of them while processing a proposal referred to them from the lower echelons.
This is important because, in the absence of clarity about what is expected of them, the functionaries in MoD in particular often start raising fundamental questions even about the necessity for incurring the expenditure. This is highly frustrating from the user’s perspective. It also adds to the negative perception about suffocating control of the services by the bureaucracy.
The third principle on which devolution should be based is combining of authority with responsibility and accountability. The financial power to sanction repair, servicing, and maintenance of dental equipment, for example, vests not even with the director general of the army dental corps but with the chief of personnel at the naval headquarters who can exercise his powers ‘subject to existing powers of the DGAFMS’ (whatever that means). Why should full power for this purpose not vest in the officer managing a dental clinic, some of whom are headed by two-star generals?
Stipulating unworkable or vague conditions for exercise of authority is equally inexplicable as it defeats the very purpose of delegation. There has to be absolute clarity about the conditions under which a functionary can invoke his powers. Those conditions have to be workable and must not hamper discharge of responsibility cast on that functionary. This reinforces the need for delegation of ‘full powers’ down the line.
There is no grave risk in delegation of full powers, wherever required, for two reasons. One, the exercise of full powers is always subject to availability of funds. Therefore, there is no danger of authorities down the line splurging the resources needlessly. Two, exercise of delegated powers is anyway subject to concurrence of integrated finance, which is intended to ensure financial and procedural propriety. As a matter of fact, even presently there are a few areas in which full powers are delegated down the line. There are no reports of improper exercise of such powers.
This brings us to the fourth principle which concerns encumbrance on exercise of powers. Presently, the administrative powers are exercisable without financial concurrence, except for those powers that have a financial implication. The financial powers are also exercisable without financial concurrence but only up to a limited extent. Beyond those limits, the financial powers can be exercised by the competent financial authorities (CFAs) only with the concurrence of the integrated financial advisors (IFAs). This is seen by CFAs as a bottleneck despite the authority vested in them to overrule the IFAs. Something principles will need to be evolved to resolve the problems besetting the IFA system, without which the operating system will remain dysfunctional.
Lastly, an important principle underlying devolution of authority is its being predicated on an efficacious system of checks and balances. While the IFA system itself serves – or should serve - that purpose to a large extent, an effective system of audit of sanctions and expenditure has to be put in place. This has been conspicuous by its absence so far. The perception that audit is a fault-finding exercise does no good. Audit has to be as concurrent as possible and its objective has to be to provide a continuous feedback to the CFAs and the MoD/SHQ on how the system of devolution of power is working on the ground. Such a feedback is necessary for taking corrective and, whenever required, punitive action to make sure that the devolution serves its purpose.
Some work has already been done on review of financial powers but it may not amount the paradigm shift that is required to remove the impediments that make the operating environment dysfunctional. While enhancement in delegation of financial powers brooks no delay and based on whatever review has already been carried out the enhanced powers should be notified immediately, steps must also be taken simultaneously for a long term overhaul of the scheme of devolution with the sole objective of purging the operating environment of the irritants that make it dysfunctional.
Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India
Dysfunctional Operating Environment in Defence: Removing the Cobwebs
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Making the operating environment congenial to efficient functioning of the services will undoubtedly require wide-ranging steps, including those related to higher defence management, to be taken but the efficacy of all those steps would always depend on devolution of power.
Devolution of power entails decentralization of administrative authority and delegation of financial powers, which must complement each other. Since the environment keeps changing the ministry of defence (MoD) should also be geared to respond promptly by tweaking the existing scheme of devolution to meet the new challenges. Sadly, this does not seem to be the case as of now.
The effort to set right the operating environment, therefore, has to start with creating a mechanism to review the existing devolution of power comprehensively based on clearly defined principles and not in an ad hoc and disjointed manner as has been the case so far.
The fundamental principle has to be empowerment of the services. The authority to carry out all core functions assigned to them must vest in the units and formations. They should be able to carry on without any let or hindrance. This may require greater devolution even within the services with the authority to carry out a task fully vesting in the functionary who is responsible for carrying out that task.
Viewed from this perspective, the present system of devolution is flawed. Those responsible for carrying out a task are not always fully authorised to take all decisions relating to that task and/or do not have full financial powers to spend the money sanctioned for carrying out that task.
MoD and even the services headquarters (SHQs) need not involve themselves in day-to-day functioning of the units. Take, for example, office contingencies and miscellaneous expenditure. Presently, even the commander-in-chief of a naval command does not have full financial powers to sanction expenditure on running of his establishment. If the expenditure involved is more than INR 20 lakh, he has to seek the approval of the vice-chief of naval staff but even the latter can sanction expenditure only up to INR 25 lakhs. Beyond this, full power vests in the joint secretary in MoD!
The point is not whether the ‘per transaction’ limits presently prescribed are adequate or not. These may well be quite adequate. The question that needs to be asked is: what is the value addition in such cases at the higher levels. What is the kind of scrutiny that a joint secretary in MoD could subject a proposal to that cannot be carried out at the level of the commander-in-chief who is a three-star officer?
MoD and the SHQs must focus on policy making, including the policy underlying devolution of authority, leaving day-to-day running of units and establishments to the functionaries at the command and lower levels. The authority to carry out a task must vest in the functionary who is responsible for carrying out that task. This, then, has to be the second guiding principle. No authority should vest in a higher echelon unless the reason for doing so is clear (as in the case of capital acquisition), in which case it should be known to functionaries exercising the powers in MoD and SHQ what is expected of them while processing a proposal referred to them from the lower echelons.
This is important because, in the absence of clarity about what is expected of them, the functionaries in MoD in particular often start raising fundamental questions even about the necessity for incurring the expenditure. This is highly frustrating from the user’s perspective. It also adds to the negative perception about suffocating control of the services by the bureaucracy.
The third principle on which devolution should be based is combining of authority with responsibility and accountability. The financial power to sanction repair, servicing, and maintenance of dental equipment, for example, vests not even with the director general of the army dental corps but with the chief of personnel at the naval headquarters who can exercise his powers ‘subject to existing powers of the DGAFMS’ (whatever that means). Why should full power for this purpose not vest in the officer managing a dental clinic, some of whom are headed by two-star generals?
Stipulating unworkable or vague conditions for exercise of authority is equally inexplicable as it defeats the very purpose of delegation. There has to be absolute clarity about the conditions under which a functionary can invoke his powers. Those conditions have to be workable and must not hamper discharge of responsibility cast on that functionary. This reinforces the need for delegation of ‘full powers’ down the line.
There is no grave risk in delegation of full powers, wherever required, for two reasons. One, the exercise of full powers is always subject to availability of funds. Therefore, there is no danger of authorities down the line splurging the resources needlessly. Two, exercise of delegated powers is anyway subject to concurrence of integrated finance, which is intended to ensure financial and procedural propriety. As a matter of fact, even presently there are a few areas in which full powers are delegated down the line. There are no reports of improper exercise of such powers.
This brings us to the fourth principle which concerns encumbrance on exercise of powers. Presently, the administrative powers are exercisable without financial concurrence, except for those powers that have a financial implication. The financial powers are also exercisable without financial concurrence but only up to a limited extent. Beyond those limits, the financial powers can be exercised by the competent financial authorities (CFAs) only with the concurrence of the integrated financial advisors (IFAs). This is seen by CFAs as a bottleneck despite the authority vested in them to overrule the IFAs. Something principles will need to be evolved to resolve the problems besetting the IFA system, without which the operating system will remain dysfunctional.
Lastly, an important principle underlying devolution of authority is its being predicated on an efficacious system of checks and balances. While the IFA system itself serves – or should serve - that purpose to a large extent, an effective system of audit of sanctions and expenditure has to be put in place. This has been conspicuous by its absence so far. The perception that audit is a fault-finding exercise does no good. Audit has to be as concurrent as possible and its objective has to be to provide a continuous feedback to the CFAs and the MoD/SHQ on how the system of devolution of power is working on the ground. Such a feedback is necessary for taking corrective and, whenever required, punitive action to make sure that the devolution serves its purpose.
Some work has already been done on review of financial powers but it may not amount the paradigm shift that is required to remove the impediments that make the operating environment dysfunctional. While enhancement in delegation of financial powers brooks no delay and based on whatever review has already been carried out the enhanced powers should be notified immediately, steps must also be taken simultaneously for a long term overhaul of the scheme of devolution with the sole objective of purging the operating environment of the irritants that make it dysfunctional.
Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India
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