Use technology to improve governance – analysis


The three key principles of  blockchain technology are transparency, decentralisation and accountability

A memorable quote paraphrased from the Arthashastra by Kautilya goes: “It is as difficult to prevent a government servant from corruption as to prevent a fish from drinking water.”

This suggests that corruption is not a new phenomenon.The East India Company is known to have struggled to keep corruption in check. In fact, the problem of corruption in the social and political spheres has often come in for strident criticism.

This issue has triggered several measures aimed at enhancing integrity in public life – the enactment of the Public Procurement Bill, Lokpal Act incorporating, inter alia, the disclosure of assets by public servants and reforms in higher judicial appointments to name a few. While there are divergent positions in terms of strategies and focus areas, the one point of convergence is the unanimous acceptance that technology and e-governance promotes greater transparency.

It has been five years since the adoption of the United Nation (UN)’s sustainable development goals (SDGs) by India and other member states. It can be argued that corruption in public life, directly or indirectly, adversely affects the achievement of all 17 SDGs. A proactive and preventive vigilance regime is critical to the realisation of these SDGs.

Governments are expectedly risk-averse in dealing with both public policies and public money while enterprises thrive on risk-taking. This often hobbles the entrepreneurial spirit in the public sector. How do we make governance more effective without inhibiting its objectives? Today, administrative affairs grapple with leakages in public delivery of welfare and development goals on account one critical problem— manual processes that can be very easily manipulated. These are often so complex and laborious that even a well-intentioned public servant is, on occasion, chary of implementing beneficial decisions. Technology can cut through much of these daunting processes.

In the recent discourse on procurement methods, transparency of policy, procedure and practices is increasingly being seen as an imperative when utilising public money.However, transparency is not an end in itself. The whole process must be open to public scrutiny. The transparency of procedure as seen in online applications is one of the simple yet effective features of digitisation, as it shifts the onus of submitting correct information and data to the applicant.

In an effort to plug leakages in procurement systems, the government launched the Government e-Marketplace (GeM) in 2016 for goods and services required by central and state governments, and public sector undertakings. This not only made it simpler to procure goods and services but also significantly impacted cost savings. An assessment by the Centre for Public Impact showed that the savings from the implementation of GeM has been substantial. The price reduction of approximately 56% of goods and services coupled with demand aggregation has led to savings of ₹40,000 crores annually.

Given the fact that the public procurement economy in India constitutes about 20% of the Gross Domestic Product (GDP), it is imperative to build on this initiative with a view to onboard as many goods and services as possible.

In the next decade, the business of government is going to experience massive disruptions. This comes on the back of technological enhancements that reduce the need for intermediaries and ensure that the sanctity of process remains unimpeachable. One such technology is blockchain. NITI Aayog released a discussion paper earlier this year, in which it identified use-cases where the technology can potentially improve governance ranging from tracing of drugs in the pharmaceutical supply chain to verification of education certificates. The three key principles of blockchain technology are transparency, decentralisation and accountability.

One of the most productive areas of intervention for this technology would be in land records. A vast developing country like India, with its diverse land tenure systems, is bound to have major problems in this area. The system is riddled with inefficiencies that reduce trust in the government. Currently the United Nations Development Programme is involved in Proof of Concept (POC) pilots across India. This is to create an immutable history of transactional records that helps in checking authenticity; create a tamper-proof system to avoid forgery; create a distributed ledger so that all stakeholders see the same information and set up a secure encrypted environment, where updates are available in near real time. The NITI Aayog paper notes that, in order to ensure that transactions are not fraudulent, the physical presence of witnesses is mandated at the time of sales deed registry. Deployment of blockchain would potentially eliminate the need of these processes while maintaining the sanctity of the transaction.

This has several spin-off benefits. It helps create a tamper-proof audit trail that allows for tracking decision-making and ensures that such decisions are in accordance with anti-corruption principles. It addresses concerns around cyber security that come with any effort towards digitisation. Currently there are interesting pilots being conducted across the world, where deployment of blockchain is being tested for public procurement.

From the perspective of Internal Controls and Governance (Vigilance), it is strongly recommended to employ a five-part test while assessing such deviations from process: One, whether the issue being pursued has corruption connotations; two, the general reputation of the employee involved; three, whether better options were available and ignored without valid reasoning; four, whether the situation inhibited the selection of any other option but the one finally chosen; and, five, whether the larger interest of the organisation was safeguarded.

However, a significant factor in blockchain’s success will be the ability to develop/reform laws and building robust data protection and maintenance regimes. Until such time, blockchain is not likely to have a significant impact in creating an integrity-first governance ecosystem.

The general environment now is in favour of a regime which ensures that companies not only do profitable business but do so in an ethical manner. The United Nations Convention against Corruption ratified by India in 2011 as well as the anti-corruption principles of the the Organization for Economic Cooperation & Development (OECD) cover a wide swathe of vulnerable areas and aspects of business operations including anti-bribery, public procurement and conflict of interest. Going forward, more countries will be obliged to establish laws and mechanisms to ensure clean business operations.

India needs to review its existing legal frameworks to address issues around, inter alia, data security, corrupt practices and corporate governance with a view to address anti-corruption objectives. The government made a significant change to the Prevention of Corruption Act in 2018. In the earlier regime, even honest public officials were harassed if a decision provided pecuniary advantage to a person without any public interest. Now the element of intention has been added under the definition of criminal misconduct. Similarly, broadening the definition of “unfair advantage” and the introduction of corporate criminal liability will go a long way in apprehending or deterring those indulging in bribery.

While these amendments will help guide the work of internal control agencies, it is important to institutionalise a system where compliance and established processes can be routinely checked and quantified. A metrics-based system for oversight in governmental processes will bring about transparency, build trust with citizens and spur further digital innovation to make any administration more robust.

We must also focus on the well-intentioned public servant who finds the processes leading to greater transparency and ensuring value for taxpayers’ money cumbersome and who is, therefore, tempted to short-circuit these. Well-intentioned though she may be, any attempt to overwrite the processes despite even demonstrable honesty of purpose, carries the major risk of opening the system to misuse by dishonest players and will lead to the loss of public trust and decimation of the structure of public procurement. It is only through robust yet streamlined procedures that a bureaucrat can achieve the intended outcome and avoid unintended consequences.

Rajesh Ranjan is an Indian Police Service officer

The views expressed are personal


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